Citizenship

I applied for the citizenship (N-400) based on 5 years as LPR but unfortunately my application got denied because of tax issues( denial based on lack of good moral character), so when i applied i mentioned as i owe IRS and i am in a payment plan ( which is true and i have been making payments as agreed) short story i owe multiple years of tax (3 years) and the reason why i because every year i ending up owing when i filed my taxes since i have high taxable income and my debt is about mid 20 thousands, so when i went for the interview i took my payment plans and receipts that when i make payments, but on the denial letter immigration office specified that i didn't justify enough why i wasn't able to pay my taxes when they were due and therefor they found me with lack of good moral character, even though when i mentioned that i support my wife and 2 yrs old baby since we are single income household but this wasn't enough.
So my question is, i have few options and i am looking for an advice, i have been given 30 days to appeal as normally they do which i think this option may not be the best the way i see, as it takes long and the final results may not be positive on my end .
My second option which i was thinking the best but i am not sure on couple things, is that i can pay off my taxes completely( which i am planing taking money from retirement savings and do so) and owing nothing to IRS and re file new N-400 which i will answer that i don't owe anything to a government, but my worries is that since i was denied first time due to GMC , paying off the debt to IRS may not negate this past findings( unless Immigration should adjudicate my new application based on what i mentioned on this new application and without looking at the fact that i was denied in the past and i was found lack of GMC), and by filling out the new application also may save some time and sort of assurance on getting approved if that above factor is not the issue( the fact that i was found lacking GMC on past application)
Can someone shed a light to me with any ideas/inputs on what is the best option , thanks !!!