General Motors

(GM) - Get Report

is pressing Congress to waive a tax liability of as much as $7 billion related to the overhaul plan that it is working to complete this month, according to reports.

The tax bill, which could be enough to force the company into bankruptcy, would be a consequence of the terms that the Treasury Department required as part of the rescue package approved last month by the Bush administration, the

New York Times

reports. In accepting the loans, the automaker pledged to persuade its creditors to swap a large chunk of the automaker's debt for equity in the company.

The

Times

reports the equity-for-debt exchange is aimed at ensuring GM's viability in the future, but under corporate tax law, the swap would amount to debt forgiveness and count as income. The resulting tax bill could take the company's cash level below the minimum needed for daily operations.

The tax issue was first reported by the

Detroit News

.

The taxes come as the automaker relies on $13.4 billion in emergency loans from the White House to keep operating, the

Wall Street Journal

reports. GM has cut costs and shut down certain operations to reduce cash outflows and preserve liquidity, but it continues to bleed billions of dollars because of a global slowdown in the auto industry and other factors, the

Journal

adds.

Congressional leaders said they are open to cooperating with GM on the issue, according to the

Journal

.

This article was written by a staff member of TheStreet.com.