diff --git a/xml/tests/src/com/intellij/codeInsight/daemon/quickFix/CollapseTagTest.java b/xml/tests/src/com/intellij/codeInsight/daemon/quickFix/CollapseTagTest.java
index 0b0e6d5b08fe..4131af0c17c5 100644
--- a/xml/tests/src/com/intellij/codeInsight/daemon/quickFix/CollapseTagTest.java
+++ b/xml/tests/src/com/intellij/codeInsight/daemon/quickFix/CollapseTagTest.java
@@ -15,9 +15,11 @@
  */
 package com.intellij.codeInsight.daemon.quickFix;
 
+import com.intellij.codeInsight.intention.IntentionAction;
 import com.intellij.ide.highlighter.XmlFileType;
 import com.intellij.psi.PsiFile;
 import com.intellij.testFramework.fixtures.LightPlatformCodeInsightFixtureTestCase;
+import com.intellij.xml.util.CheckTagEmptyBodyInspection;
 import com.intellij.xml.util.CollapseTagIntention;
 
 /**
@@ -39,4 +41,18 @@ public class CollapseTagTest extends LightPlatformCodeInsightFixtureTestCase{
     PsiFile file = myFixture.configureByText(XmlFileType.INSTANCE, "<a/>");
     assertFalse(new CollapseTagIntention().isAvailable(getProject(), myFixture.getEditor(), file));
   }
+
+  public void testCollapseInnerTag() {
+    myFixture.enableInspections(new CheckTagEmptyBodyInspection());
+    PsiFile file = myFixture.configureByText(XmlFileType.INSTANCE, "<a>\n" +
+                                                                   "    <b></b><caret>\n" +
+                                                                   "</a>");
+    assertFalse(new CollapseTagIntention().isAvailable(getProject(), myFixture.getEditor(), file));
+    IntentionAction action = myFixture.findSingleIntention("Collapse");
+    assertNotNull(action);
+    action.invoke(getProject(), myFixture.getEditor(), file);
+    myFixture.checkResult("<a>\n" +
+                          "    <b/>\n" +
+                          "</a>");
+  }
 }
diff --git a/xml/xml-analysis-impl/src/com/intellij/xml/util/CheckTagEmptyBodyInspection.java b/xml/xml-analysis-impl/src/com/intellij/xml/util/CheckTagEmptyBodyInspection.java
index aacf90df3848..622200a439f4 100644
--- a/xml/xml-analysis-impl/src/com/intellij/xml/util/CheckTagEmptyBodyInspection.java
+++ b/xml/xml-analysis-impl/src/com/intellij/xml/util/CheckTagEmptyBodyInspection.java
@@ -16,7 +16,6 @@
 
 package com.intellij.xml.util;
 
-import com.intellij.codeInspection.LocalQuickFix;
 import com.intellij.codeInspection.ProblemsHolder;
 import com.intellij.codeInspection.XmlInspectionGroupNames;
 import com.intellij.codeInspection.XmlSuppressableInspectionTool;
@@ -24,12 +23,11 @@ import com.intellij.lang.ASTNode;
 import com.intellij.lang.xml.XMLLanguage;
 import com.intellij.openapi.editor.Editor;
 import com.intellij.openapi.project.Project;
-import com.intellij.psi.PsiElementVisitor;
-import com.intellij.psi.PsiFile;
-import com.intellij.psi.XmlElementVisitor;
+import com.intellij.psi.*;
 import com.intellij.psi.xml.XmlChildRole;
 import com.intellij.psi.xml.XmlTag;
 import com.intellij.psi.xml.XmlTokenType;
+import com.intellij.util.IncorrectOperationException;
 import com.intellij.xml.XmlBundle;
 import com.intellij.xml.XmlExtension;
 import org.jetbrains.annotations.NonNls;
@@ -57,11 +55,10 @@ public class CheckTagEmptyBodyInspection extends XmlSuppressableInspectionTool {
 
             if (node != null &&
                 node.getElementType() == XmlTokenType.XML_END_TAG_START) {
-              final LocalQuickFix localQuickFix = new Fix();
               holder.registerProblem(
                 tag,
                 XmlBundle.message("xml.inspections.tag.empty.body"),
-                isCollapsibleTag(tag) ? localQuickFix : null
+                isCollapsibleTag(tag) ? new Fix(tag) : null
               );
             }
           }
@@ -96,8 +93,22 @@ public class CheckTagEmptyBodyInspection extends XmlSuppressableInspectionTool {
     return "CheckTagEmptyBody";
   }
 
-  @SuppressWarnings("IntentionDescriptionNotFoundInspection")
   public static class Fix extends CollapseTagIntention {
+    private final SmartPsiElementPointer<XmlTag> myPointer;
+
+    public Fix(XmlTag tag) {
+      myPointer = SmartPointerManager.getInstance(tag.getProject()).createSmartPsiElementPointer(tag);
+    }
+
+    @Override
+    public void invoke(@NotNull Project project, Editor editor, PsiFile file) throws IncorrectOperationException {
+      XmlTag tag = myPointer.getElement();
+      if (tag == null) {
+        return;
+      }
+      applyFix(project, tag);
+    }
+
     @Override
     public boolean isAvailable(@NotNull Project project, Editor editor, PsiFile file) {
       return true;
diff --git a/xml/xml-analysis-impl/src/com/intellij/xml/util/CollapseTagIntention.java b/xml/xml-analysis-impl/src/com/intellij/xml/util/CollapseTagIntention.java
index ab4810993ab5..ef8a2cc47871 100644
--- a/xml/xml-analysis-impl/src/com/intellij/xml/util/CollapseTagIntention.java
+++ b/xml/xml-analysis-impl/src/com/intellij/xml/util/CollapseTagIntention.java
@@ -97,7 +97,7 @@ public class CollapseTagIntention implements LocalQuickFix, IntentionAction {
     return false;
   }
 
-  private static void applyFix(@NotNull final Project project, @NotNull final PsiElement tag) {
+  protected static void applyFix(@NotNull final Project project, @NotNull final PsiElement tag) {
     if (!FileModificationService.getInstance().prepareFileForWrite(tag.getContainingFile())) {
       return;
     }