FedEx Corp., which has been
in the hot seat lately over allegations of misclassifying delivery drivers as independent
contractors (see CWHA October 2007 and October
2006), could owe a whopping $319 million in back taxes and penalties because of
the classification problems, the IRS has tentatively concluded. The IRS
assessment, which pertains only to 2002, was disclosed by FedEx in a securities
filing. The IRS is also looking at classification issues for subsequent years,
so the company could be on the hook for much more. FedEx maintains that its
drivers are independent contractors, and the company plans to defend its
position before the IRS.
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