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IRS orders FedEx to pay $319 mln
http://www.marketwatch.com/ ^ | December 22, 2007 | Greg Morcroft,

Posted on 12/22/2007 2:49:32 PM PST by lowbridge

FedEx Corp. said late Friday that the Internal Revenue Service has ordered the company to pay back taxes and fines totaling $319 million for ground employees the firm misclassified as independent contractors.

The ruling covers 13,000 employees FedEx had in 2002, and the company said that the IRS is investigating the status of contractors hired between 2004 and 2006. That probe could lead to further penalties, the company said.

(Excerpt) Read more at marketwatch.com ...


TOPICS: Business/Economy; Culture/Society; News/Current Events
KEYWORDS: fedex; irs
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To: moehoward

Bottom line. These delivery guys are not independent in any sense.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

There are many thousands of independent truckers who haul for one company only, are they all to be reclassified? FedEx looks like just a starting point to me. What about sales reps who work for straight commission?


141 posted on 12/24/2007 7:30:29 AM PST by RipSawyer (Does anyone still believe this is a free country?)
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To: RipSawyer
Teamsters President Jim Hoffa said: “”What a great Christmas gift to FedEx Ground workers who have suffered under FedEx’s illegal independent contractor scam.”

FedEx is non-union (UPS is a union shop), so I'm sure Hoffa and Co. delight in anything negative relating to FedEx.

142 posted on 12/24/2007 7:32:34 AM PST by NittanyLion
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To: NittanyLion

I’m sure it has something to do with size and volume. We’re a small company (less than 10 employees) and don’t do as much shipping as the big boys do.


143 posted on 12/24/2007 7:35:06 AM PST by reagan_fanatic (Ron Paul put the cuckoo in my Cocoa Puffs)
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To: purpleraine

......Who are all those people they pick up packages from and deliver them to?......

They are delivery sites.

The solution is for the contractors to be corporations rather than individuals. Corporations can deal as they please with vendors.


144 posted on 12/24/2007 7:37:43 AM PST by bert (K.E. N.P. +12 . Moveon is not us...... Moveon is the enemy)
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To: Myrddin

Every Ground contractor actually buys and owns their routes.The guy who pressed for this lawsuit in the first place was an embittered ex-contractor who had already lost his contract. It takes a bit of doing before one loses a contract.


145 posted on 12/24/2007 7:39:18 AM PST by HungarianGypsy
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To: shadeaud

I think they will be required to transmit it electronically. If one’s taxes are over a certain amount, electronic transmission is required.


146 posted on 12/24/2007 7:41:01 AM PST by Daveinyork
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To: lowbridge

Will the IRS now refund money to all the independent contractors? Or will they collect from the FedEx AND keep the taxes they already collected?


147 posted on 12/24/2007 7:42:13 AM PST by HungarianGypsy
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To: Myrddin
I don’t understand the problem. You said that as a contractor you could work as many or as few hours as you wanted, but you were glad to go back to direct status so you didn’t have to work yourself to death. Why not just work 8/40 as a contractor, since you were given the extra money per hour to pay for insurance, vacation, etc? I definitely agree with you about the value of having an office with a door, though.

I guess the bottom line is different strokes for different folks. I value the compartmentalization I get as an independent. I buy my own health insurance, or not. None of my customers is going to get a printout of what medications I buy or what I see the doctor for, etc., like an employer may. No information escapes the compartment except things that actually have to do with our relationship.

Of course, my situation is different from the one in dispute here. I work for many customers, at my location as well as theirs, and the work for which I contract includes more than just my man hours, so there is no question that I’m truly an independent.

148 posted on 12/24/2007 9:46:49 AM PST by Still Thinking (Quis custodiet ipsos custodes?)
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To: RipSawyer

—”There are many thousands of independent truckers who haul for one company........”—

Are these independent truckers required to wear the company uniform and have their trucks prominently display company advertising?


149 posted on 12/24/2007 10:27:40 AM PST by moehoward
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To: shadeaud
use the U.S.P.O. to deliver the moolah. That way they can be assured it will be delivered by Christmas(2008)

Fershur....our friends in Florida mailed us a Christmas package via USPS, and have been tracking it.

Today's Monday the 24th - tracking indicates it's been in our city's post office since last Wednesday the 19th.

150 posted on 12/24/2007 10:32:20 AM PST by ErnBatavia (...forward this to your 10 very best friends....)
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To: NittanyLion

—”RPS was purchased by FedEx, and as far as I know the employees went with the deal.”—

They did. And then new people and equipment were added.

Remember Flying Tigers? That was what is now FedEx.


151 posted on 12/24/2007 10:32:33 AM PST by moehoward
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To: dearolddad
Don't get me started on how crummy DHL's service is.

Heh.... It took DHL 11 days to get my Dell laptop to me. 5 days of that it spent sitting in the depot 4 miles from my home. Some guy in a beat up van finally shows up with it on Saturday, pushes the handhelp scanner at me and asks me to sign... He has lost his touch screen pen and just tells me to sign with my finger.... Oh, a very dangerous suggestion. :)
152 posted on 12/24/2007 10:37:46 AM PST by Daus
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To: moehoward

When a PC manufacturer signs an exclusivity agreement with Microsoft, and solely supplies MS Windows, and labels and advertises Microsoft and MS products prominently all over its computers, popping up on the screen, on packaging or even on its commercials — then I suppose that by your line of reasoning the company is now a wholly-owned subsidiary of Microsoft.


153 posted on 12/24/2007 10:38:15 AM PST by bvw
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To: HungarianGypsy
Every Ground contractor actually buys and owns their routes.The guy who pressed for this lawsuit in the first place was an embittered ex-contractor who had already lost his contract. It takes a bit of doing before one loses a contract.

There is always two sides to a story. It sounds like the ex-contractor really screwed up if he lost his contract.

154 posted on 12/24/2007 10:38:15 AM PST by Myrddin
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To: Still Thinking
Returning to full time status put me on a very good benefits package. It also put me back in the fray to work on a wider variety of interesting projects. Even better, I work from home now. I divide my time over two big contracts whose work peaks are nicely interlaced. The arrangement has all the charm of being an independent with all the ease of having the company manage the payroll and other administrivia. I have my whole library at hand without fear of having my books stolen from a company office. No commute or parking expenses. No work interruptions from fellow employees conducting loud phone calls with a speaker phone.
155 posted on 12/24/2007 10:46:02 AM PST by Myrddin
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To: Myrddin
The government will pay sales tax on its purchases.

Just as it does now. When the DOD procures a system from a defense contractor, it pays for all labor, materials and profit the contractor is owed. And in labor, materials and profit are embedded payroll taxes, income tax and corporate tax. Those amounts are embedded in the price of the system procured.

So your argument at the outset fails. The government pays for federal taxes now in its purchases.

That is the same as a cow living on its own milk.

Not worthy of comment, irrelevant, not publishable.

The government has no money to pay taxes save what it collects in taxes.

The government borrows.

The missing revenues will be recovered through an even higher tax rate than has been claimed...or an expanded scope of things subject to the sales tax.

Complete and utter fabrication, no backup and not plausible.

The "pre-bate" is socialist redistribution. It will create yet another giant government bureaucracy.

Same comment as above. The Rebate effectively excludes federal taxes for ALL REGISTERED ELIGIBLE AMERICANS up to the level of poverty. There is no other way of excluding federal burden except by rebate. A system of deduction would require filing an income statement, the very system the FairTax abolishes. Therefore, a Rebate is the only system that is feasible and it can involve the usage of smartcards.

The Rebate is necessary because the abomination known as the Income tax was originally brought about by a flaw in the system of excise taxes. Excise taxes hit smaller farmers harder than larger farmers as a proportion of their income. This 'disproportionate' burden is completely erased with the Rebate which is available to every one from retirees living on Social Security to the wealthy. The Rebate does not play favorites. It was not possible to have a Rebate prior to 1913 because the federal government did not have the administrative technology and capability to manage a rebate.

Eliminate sales taxes on food and you eliminate the justification for this "pre-bate" and the associated bureaucracy.

Overly simplistic bordering on the absurd. There are other necessities besides food.

It creates double taxation by taxing purchases made with money already taxed by the current income tax.

Your argument here fails in the same way as at the beginning. All purchases made today are paying as part of the price the embedded federal taxes from labor, material and profits. The FairTax replaces these embedded taxes. It does not create a new tax on an existing tax, it creates a replacement tax that consolidates all other taxes together and replaces them at the end of the production chain and service outlet with the NRST.

Those who have substantial savings from their after tax earnings will get screwed big time.

Same as above and at the beginning.

Lastly, nowhere is the FairTax dishonest. The only thing dishonest is what you showed in your original post. On the other hand if you are plain ignorant, then this post should make you more aware.

For more information:

http://www.fairtax.org

156 posted on 12/24/2007 10:48:59 AM PST by Hostage
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To: bvw

—”by your line of reasoning”—

Not my reasoning. It’s the Feds. I just understand why they come to the conclusion.

—”When a PC manufacturer signs an exclusivity agreement with Microsoft....”—

Does your exclusive Microsoft vendor report to Microsoft daily for work? Do they deliver the products in Microsoft vehicles, wearing Microsoft uniforms?


157 posted on 12/24/2007 11:32:13 AM PST by moehoward
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To: Taxman
I was just about to ask if we have any FReepers who are FedEx “employess.” And what they have to say about this situation.

Enquiring minds want to know.


Well, I do work at the corporate HQ, accounts payable, so I don't drive or deliver. Still the way I understand it is that under the old RPS system the drivers were contractors and under Fed Ex, we kept them that way. The drivers can hire help and whatever as they are needed, they can even have more than one vehicle, and we do assist them with maintenance on their vehicles and supplies. It's sort of like if you opened up a franchise with McDonalds for example.

I think this IRS ruling is ludicrious, nothing more than a shakedown, so I hope it is appealed and struck down. $319 mllion to pay, that would really hurt.
158 posted on 12/24/2007 2:19:45 PM PST by Nowhere Man (Goofus hits the computer's power button to turn it off, Gallant shuts down properly)
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To: Daus
Heh.... It took DHL 11 days to get my Dell laptop to me. 5 days of that it spent sitting in the depot 4 miles from my home. Some guy in a beat up van finally shows up with it on Saturday, pushes the handhelp scanner at me and asks me to sign... He has lost his touch screen pen and just tells me to sign with my finger.... Oh, a very dangerous suggestion. :)

DHL has always been kind of iffy, not on time all the time. I'm not being prejudiced here since I work for Fed Ex, but when I developed pictures at a drugstore photolab, there were times that special orders were delivered late and I had to sheepishly explain that to the customer quite a few times about it.
159 posted on 12/24/2007 2:24:13 PM PST by Nowhere Man (Goofus hits the computer's power button to turn it off, Gallant shuts down properly)
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To: Hostage
The government has no money to pay taxes save what it collects in taxes.

The government borrows.

That which is borrowed must be repaid...with interest...from TAXES.

No further comments are required.

160 posted on 12/24/2007 6:37:35 PM PST by Myrddin
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