Do you owe any Federal, state or local taxes which are overdue?

I don't understand the wording of this question. I have owed a little, when I have filed my taxes the past couple of years. But I have set up an installment plan with the IRS and always paid on time each month. I have also filed my taxes on time each year that I have been in the USA.

I am tempted to put no on this question, as I have an installment plan set up and pay on time. Any thoughts?

I would answer no, but I would attach an explanation of your situation. Furthermore, I would call IRS to see if you can procure a letter that says that you're in good standing with them. I believe this answer is for people who continually reject to file or pay their income taxes and let them slide. You, on the other hand, aren't letting it slide, you are just having to pay in installments. Also, I would contact USCIS to verify this.