diff --git a/itest/lnd_coop_close_external_delivery_test.go b/itest/lnd_coop_close_external_delivery_test.go
index 755792303..57c2da2f4 100644
--- a/itest/lnd_coop_close_external_delivery_test.go
+++ b/itest/lnd_coop_close_external_delivery_test.go
@@ -10,13 +10,44 @@ import (
 )
 
 func testCoopCloseWithExternalDelivery(ht *lntest.HarnessTest) {
-	ht.Run("set delivery address at open", func(t *testing.T) {
+	ok := ht.Run("set P2WPKH delivery address at open", func(t *testing.T) {
 		tt := ht.Subtest(t)
-		testCoopCloseWithExternalDeliveryImpl(tt, true)
+		testCoopCloseWithExternalDeliveryImpl(
+			tt, true, lnrpc.AddressType_UNUSED_WITNESS_PUBKEY_HASH,
+		)
 	})
-	ht.Run("set delivery address at close", func(t *testing.T) {
+	// Abort the test if failed.
+	if !ok {
+		return
+	}
+
+	ok = ht.Run("set P2WPKH delivery address at close", func(t *testing.T) {
 		tt := ht.Subtest(t)
-		testCoopCloseWithExternalDeliveryImpl(tt, false)
+		testCoopCloseWithExternalDeliveryImpl(
+			tt, false, lnrpc.AddressType_UNUSED_WITNESS_PUBKEY_HASH,
+		)
+	})
+	// Abort the test if failed.
+	if !ok {
+		return
+	}
+
+	ok = ht.Run("set P2TR delivery address at open", func(t *testing.T) {
+		tt := ht.Subtest(t)
+		testCoopCloseWithExternalDeliveryImpl(
+			tt, true, lnrpc.AddressType_UNUSED_TAPROOT_PUBKEY,
+		)
+	})
+	// Abort the test if failed.
+	if !ok {
+		return
+	}
+
+	ht.Run("set P2TR delivery address at close", func(t *testing.T) {
+		tt := ht.Subtest(t)
+		testCoopCloseWithExternalDeliveryImpl(
+			tt, false, lnrpc.AddressType_UNUSED_TAPROOT_PUBKEY,
+		)
 	})
 }
 
@@ -25,7 +56,7 @@ func testCoopCloseWithExternalDelivery(ht *lntest.HarnessTest) {
 // not. Some users set this value to be an address in a different wallet and
 // this should not affect our ability to accurately report the settled balance.
 func testCoopCloseWithExternalDeliveryImpl(ht *lntest.HarnessTest,
-	upfrontShutdown bool) {
+	upfrontShutdown bool, deliveryAddressType lnrpc.AddressType) {
 
 	alice, bob := ht.Alice, ht.Bob
 	ht.ConnectNodes(alice, bob)
@@ -35,7 +66,7 @@ func testCoopCloseWithExternalDeliveryImpl(ht *lntest.HarnessTest,
 	// wallet. We already correctly track settled balances when the address
 	// is in the LND wallet.
 	addr := bob.RPC.NewAddress(&lnrpc.NewAddressRequest{
-		Type: lnrpc.AddressType_UNUSED_WITNESS_PUBKEY_HASH,
+		Type: deliveryAddressType,
 	})
 
 	// Prepare for channel open.
diff --git a/lnwallet/interface.go b/lnwallet/interface.go
index 23475bcd4..9a8d9fa82 100644
--- a/lnwallet/interface.go
+++ b/lnwallet/interface.go
@@ -632,6 +632,19 @@ func InternalKeyForAddr(wallet WalletController, netParams *chaincfg.Params,
 
 	walletAddr, err := wallet.AddressInfo(addr)
 	if err != nil {
+		// If the error is that the address can't be found, it is not
+		// an error. This happens when any channel which is not a custom
+		// taproot channel is cooperatively closed to an external P2TR
+		// address. In this case there is no internal key associated
+		// with the address. Callers can use the .Option() method to get
+		// an option value.
+		var managerErr waddrmgr.ManagerError
+		if errors.As(err, &managerErr) &&
+			managerErr.ErrorCode == waddrmgr.ErrAddressNotFound {
+
+			return none, nil
+		}
+
 		return none, err
 	}