FedEx Facing $319 Million in Back Taxes After IRS Audit

FedEx Corp. may have to pay $319 million in back taxes and penalties for misclassifying its ground-delivery workers as contractors in 2002, Bloomberg reported.

The Internal Revenue Service also is auditing the company’s trucking unit for the years 2004 to 2006 to see whether workers were wrongly labeled as contractors rather than employees for tax purposes, FedEx said in a filing Friday with the Securities and Exchange Commission, Bloomberg reported.

FedEx said it would have to pay interest on the 2002 bill, but the company said it would “vigorously defend” it position that its FedEx Ground unit’s owner-operators are independent contractors, Bloomberg reported.

Last week, FedEx was fined $190,000 by Massachusetts’ attorney general for misclassifying 13 drivers as independent workers rather than full-time employees, Bloomberg reported.

FedEx Ground also faces class-action lawsuits in federal court in Indiana, where contract drivers claim they are supervised and controlled as employees, while the company maintains the drivers work for themselves, and not the company, Bloomberg said.

The Teamsters union said in a statement it welcomed the decision by the IRS to investigate the company.

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