Should be much more than 1/8". Anyway, I used a recip saw to slice the inside and outside along the bottom of the frame rail simultaneously, working forward from the back until I got close to the tank. Then I used a cut-off disc to slice the outside and forward edge so all that was left holding it on was the inside part next to the tank. I beat a cold chisel into the slice on the outside to spread the gap open far enough to get a pry bar into the gap, then pried the bracket downward as far as I could. This gave me plenty of room to use the cut-off disc to score the remaining back wall. Then I bent the bracket up and down until it snapped off. Cleaned up the remains on the frame with a flap disc and painted. Nuttin to it.
*EDIT*
Link to post in my build thread for pertinent pics. Also- maybe it's not much more than 1/8". I forgot how close it was. I was picturing it to be more around 1/2" clearance. You could always slip a piece of metal back there as an extra layer of protection while cutting the bracket. I get pretty surgical with a cut-off wheel so I felt comfortable with how I did it.
https://www.tahoeyukonforum.com/threads/growing-up-doesnt-have-to-suck.93510/page-19#post-1320078
After checking out those pics, I'll take another look today.