FedEx Says IRS Won’t Require Some Employment Taxes
FedEx Corp. said the federal government will not require it to pay employment taxes for contract drivers in its ground-delivery unit for 2004 through 2006, supporting its assertion that they should not be treated as employees, Bloomberg reported.
The company said recently that an Internal Revenue Service audit team has proposed that no assessment of federal employment taxes be made against the company’s ground parcel unit for 2002, an important step in FedEx’s continuing legal battle over whether some of its workers are classified as independent contractors or employees.
Similar issues may be audited by the IRS for 2007 and 2008, and the agency probably would “reach the same conclusion” should that occur, FedEx said in a regulatory filing, Bloomberg reported.
The IRS last month finished a similar audit for 2002 and said it would assess taxes for that year, a reversal from December 2007, when it said FedEx may have to pay $319 million in back taxes and penalties for misclassifying the ground-delivery drivers as contractors in 2002 and possibly other years, Bloomberg said.
FedEx’s Oct. 30 announcement of a revised tax adjustment cements a move made more than a year ago, when the IRS withdrew its tentative assessment the $319 million against its FedEx Ground unit for 2002 taxes. (Click here for previous story.)
The company is contesting a class-action lawsuit in federal court in Indiana in which ground-unit drivers say they are treated as full-time employees and should receive benefits.
FedEx is ranked No. 2 on the Transport Topics 100 listing of U.S. and Canadian for-hire carriers.
