FedEx says IRS has withdrawn $319M tax, penalty assessment

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FedEx announced Thursday, Oct. 23, that the Internal Revenue Service has withdrawn its tentative assessment of tax and penalties for the 2002 calendar year — $319 million plus interest — against FedEx Ground Package System Inc. relating to the classification of FedEx Ground’s owner-operators for federal employment tax purposes.

FedEx says the IRS — which withdrew its assessment on Wednesday, Oct. 21 — is continuing its employment tax audit of FedEx Ground for the 2002 calendar year.

“We are engaged in discussions with the IRS audit team regarding this matter,” the company says. “We continue to believe that FedEx Ground’s owner-operators are independent contractors and that no loss is probable in this matter.”