FedEx proclaims “strong defenses” to driver issue
FedEx Corp. responding to a tentative Internal Revenue Service assessment last month that FedEx Ground drivers are employees, not independent contractors, said it is preparing to meet with an IRS audit team this spring.“We believe that we have strong defenses to the IRS’s tentative assessment and will vigorously defend our position, as we continue to believe that FedEx Ground’s owner-operators are independent contractors and that no loss is probable,” FedEx said in a statement.
“It is expected that the meeting will occur in the spring of 2008 and that a final resolution of this matter will not occur for some time,” the company said.
In its second quarter form 10-Q filed on Dec. 21, 2007, FedEx disclosed that the IRS has indicated it anticipates assessing tax and penalties of $319 million plus interest for 2002. It said substantially all of the IRS’s tentative assessment relates to employment and withholding taxes for the 2002 calendar year and, if paid by the company, would be fully deductible. Similar issues are under audit by the IRS for calendar years 2004 through 2006.
