FedEx Says IRS Withdrew Penalty on Worker Classification

FedEx Corp. said the IRS has withdrawn tentative taxes and penalties of more than $319 million stemming from whether the company incorrectly classified employees as independent contractors, the Associated Press reported.

In a U.S. Securities and Exchange Commission filing, FedEx said the IRS withdrew an assessment of levies against its FedEx Ground unit for the 2002 calendar year that totaled $319 million plus interest, AP reported.

The IRS is still examining the company’s classification of workers for federal employment-tax purposes, AP said.

FedEx considers the workers owner-operators.

“We are engaged in discussions with the IRS audit team regarding this matter,” FedEx said in its filing. “We continue to believe that FedEx Ground’s owner-operators are independent contractors and that no loss is probable in this matter.”

FedEx is ranked No. 2 on the Transport Topics 100 listing of U.S. and Canadian for-hire carriers.