IRS Fresh Start may expand tax payment options, but there’s one thing to watch out for

The start of April means Tax Day is quickly approaching — and many Americans still need to file in the coming weeks. So far, the IRS says it has received about 78.8 million tax returns, down from around 79.6 million this time last year.

If you haven’t yet filed, you still have a couple of weeks until the April 15 deadline. By then, you must both file your federal tax return and pay any amount you owe. If you can’t pay the taxes you owe in full, your tax costs can quickly rise.

Taxpayers who owe balances have a few options to repay the IRS, including payment plans and forbearance programs. But if you owe back taxes, you may start to see targeted ads from companies promising a fresh start by settling your debt for you at a much lower cost than you owe.

However, these companies often make promises for savings they can’t guarantee and offer services that you can already get through the IRS directly.

Here’s what you need to know about the IRS’s programs for helping pay down debt, and how to find out if you qualify today.

Read more: What if I can’t pay my taxes? 5 ways to tackle your bill.

Fresh Start isn’t actually an IRS program that will erase your tax balance or eliminate debt.

Fresh Start was an initiative launched in 2011 that simply expanded upon existing IRS payment options available to some eligible taxpayers.

The changes were designed to “help struggling taxpayers get a fresh start,” according to the IRS. Specifically, the Fresh Start program centered on two goals: helping Americans pay back taxes they owe and avoid tax liens.

To help taxpayers pay back taxes owed, the IRS expanded its offer in compromise (OIC) program to include taxpayers earning up to $100,000 who owe less than $50,000 (double the $25,000 limit at the time). An offer in compromise lets eligible taxpayers settle their debt with the IRS for less than they owe. Acceptance of an offer is based on whether a taxpayer can pay in full based on their income and assets.

For help with federal tax liens, the Fresh Start program increased the dollar amount taxpayers must owe before the IRS files a lien against their assets and property, and allowed taxpayers to request the lien be withdrawn after they pay. Taxpayers owing less than $25,000 may also request a lien withdrawal after entering into or converting to a direct debit installment agreement.

The changes made with Fresh Start in 2011 still apply to eligible taxpayers who owe balances to the IRS today. Here’s more info about how offers in compromise and lien withdrawals work today — and how to figure out if you qualify.

Today, you can submit an offer in compromise to the IRS online to try to settle your tax debt at a lower amount than you owe. You don’t need to work with a third-party company for the settlement, and the IRS advises that you make sure you check the qualifications of any professional you hire to help you with your offer.

You can apply for an OIC yourself. The IRS will consider your offer along with your overall finances, including your income, expenses, and assets. The IRS says it generally approves an offer in compromise “when the amount you offer represents the most we can expect to collect within a reasonable period of time.”

When you apply, you’ll need to submit both a $205 application fee and your initial payment (unless you qualify for low-income status), along with the required forms. Depending on your offer, the payment will either be a lump sum worth 20% of your offer amount or a monthly installment payment. You should also continue to make the payments outlined in your offer while you wait for acceptance from the IRS.

If the IRS places a lien on your property, you can request a withdrawal after you pay what you owe, which will remove the public Notice of Federal Tax Lien. Getting a lien withdrawn can help your credit score, even while you may still owe a tax balance.

Withdrawal options introduced by the Fresh Start program still apply today.

First, you may be eligible for a withdrawal after you pay your tax balance and are up-to-date on payments and filings for at least three years.

The other option allows you to request a withdrawal after you enter into a direct debit installment agreement with the IRS and meet certain eligibility requirements, including the following:

Be a qualifying taxpayer

Owe less than $25,000

Have a direct debit installment agreement that will pay your full balance within 60 months

Have already made three consecutive direct debit payments

Be in compliance with other payments and filing

Have not defaulted on any direct debit installment plan (current or past)

Direct debit installment agreements are long-term payment plan options available to taxpayers who owe $50,000 or less (including taxes, penalties, and interest payments) and have filed all their returns. With this type of plan, you can make monthly payments toward your balance for up to 72 months. Direct debit allows you to link your bank account so your monthly payment can be automatically withdrawn.

Today, the IRS requires direct debit for installment plans with balances between $25,000 and $50,000. When you apply for a long-term installment agreement with direct debit online, there’s a $22 setup fee (unless you qualify for low-income status).

Offers in compromise and lien withdrawals are just two IRS plans available to eligible taxpayers who owe a tax balance. If you’re having trouble making your tax payments or you’re not sure you’ll be able to pay your full amount owed this year, here are a few more options to consider:

A short-term payment plan through the IRS gives you up to 180 additional days to pay your balance in full. You can qualify with a balance of $100,000 or less in combined taxes, penalties, and interest. There’s no setup fee, but you’ll still accrue fees and interest as you pay down your plan balance.

You can also apply for a long-term installment agreement (like the one described above). This can be useful for paying down your balance, even if the IRS hasn’t put a lien on your property.

You can request by phone that the IRS place your account in “currently not collectible” (CNC) status if you’re experiencing financial hardship. You’ll still owe your full balance — and continue to accrue penalties and interest — but the IRS will halt collections.

Over time, the agency will review your financial situation to determine if you can resume making payments.

Instead of a plan with the IRS, you could use a personal loan or a 0% APR credit card to pay the taxes you owe, then pay down the balance on the loan or card.

You will generally need a good credit score to qualify for either. But IRS interest rates may still be lower than the personal loan rates you’ll qualify for. Even with a credit card that has a 0% APR, you’ll risk accruing interest at the card’s high ongoing interest rate if you don’t pay your balance in full by the end of the intro period. Plus, you’ll have to pay fees to pay your tax balance with a credit card.

Check for prequalification offers and make sure you have a repayment plan before you decide if a loan or credit card might be a more affordable option.