On occasion you'll do piroettes in tap. It kind of depends on the style of tap and what the choreographer wants. But you really need to be able to do double piroettes before you move up a level. They're pretty easy, just find your center of balance and spot, and don't look down. Keep your shoulders up, butt tucked under and the rest of your body tight and in control. It just takes practice :)
As for being put in level one, they wouldn't have put you there unless you didn't have the skills at this point for level two. You haven't taken tap in a while and no one can walk back into tap beyond the first level (unless they just skipped a year). Just refresh on the basics and then I'm sure by next year you'll be more than ready to move up. You don't want to be put in a higher level and not be able to do it. Teachers want you to be in a level where you'll learn, but excel.