IRS Says FedEx Owes $319 Million in Back Taxes
December 24, 2007 – 4:00 pmFedex Corp said on Friday that the Internal Revenue Service found that its FedEx Ground independent contractors should be reclassified as employees for tax purposes and that the company faced related taxes and penalties of more than $319 million for 2002.
The IRS is auditing similar issues for 2004 through 2006, the package delivery company said in the filing with the U.S. Securities and Exchange Commission. “Given the preliminary status of this matter, we cannot yet determine the amount or a reasonable range of potential loss. However, we do not believe that any loss is probable,” Fedex said in the filing.
The International Brotherhood of Teamsters, which has asserted FedEx Ground workers are in fact employees and which is campaigning to unionize FedEx Ground drivers, welcomed the IRS decision. “It’s game over for FedEx’s independent contractor scam,” union President Jim Hoffa said in a statement.