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 ...
I have been on the receiving end of this as well. Worked for a small company, in house, as an independent, at their request. Got a letter from the IRS after two years saying I was not “independent” because they were my only ‘customer’.
In this situation the IRS is going after FedEX to avoid going after each “independent”.
FedEx knew they were getting into this. Fact is these guys aren’t “independent” any more than I was. Our employers did this to cut costs.
UPS has been wanting to do this as well.
In their perfect world they’d have Illegals delivering freight.
I’ve been doing it 14 years. Fed Ex has lost only 1 COD check, which in reality they probably never collected to begin with.
As a consumer, I love them. I would NEVER want to work for them.
I use FedEx as my main shipper at work. Last week I got a letter stating rates are going up an average of 8%. I wonder how much of that increase is to cover FedEx’s ass regarding these fines.
—”How is FedEx the contractors sole customer..”—
From what I understand. The ground service is handled by bid. You bid for the contract. Delivered in your trucks that are emblazoned with FedEx ground logos.
Fed Ex is the only client. In my book, these guys work for FedEx.
Probably more to do with fuel costs.
You are ABSOLUTELY correct!
With the FairTax in place as the law of the land this kind of BS, and it's costs which the customers wind up paying, will be nothing more than a distant memory!
Thanks!
Aesop's FablesYou are like the Fox Who Lost His Tail. Quit cheering for the trappers, who'd have us all, because you lost yours.
The Fox Without a TailIt happened that a Fox caught its tail in a trap, and in struggling to release himself lost all of it but the stump. At first he was ashamed to show himself among his fellow foxes. But at last he determined to put a bolder face upon his misfortune, and summoned all the foxes to a general meeting to consider a proposal which he had to place before them. When they had assembled together the Fox proposed that they should all do away with their tails. He pointed out how inconvenient a tail was when they were pursued by their enemies, the dogs; how much it was in the way when they desired to sit down and hold a friendly conversation with one another. He failed to see any advantage in carrying about such a useless encumbrance. "That is all very well," said one of the older foxes; "but I do not think you would have recommended us to dispense with our chief ornament if you had not happened to lose it yourself."
It’s easy enough to do. Send a Notice of Levy to FedEx’s bank accounts, especially the ones they use for payroll. That will get some attention quickly.
The IRS didn’t order FEDEX to pay these back taxes and fines. They ordered the customers of FEDEX to pay these back taxes and fines. Corporations do not pay taxes. They collect taxes from their customers and pass them on to the government.
Not quite.
I didn’t lose anything. In fact, I now own the company that I used to be an “independent contractor” for.
Bottom line. These delivery guys are not independent in any sense. Construction contractors can work for one customer for a year or two, but they have every intention of working for another customer ASAP. Not so with these delivery drivers. In fact they hope to work for ONLY FedEX for as long as possible.
Correct.
These drivers are NOT truly independent. They are “independent” in FedEx’s eyes because they must bid for the route. Then provide the trucks, drivers, etc. But they ONLY work for FedEx at FedEx advertised rates.
The Fair Tax would not apply in this situation as the IRS is fining them for not paying the Social Security and Medicare taxes, has nothing to do with income taxes.
They debase the currency more and more, then they tax what’s left over more and more.
What a racket.
I would think the customer is the one who sends and receives packages through FedEx.
They are.
But FedEx considers itself to also be a customer of it’s so-called independent contractors. Problem is, they are the ONLY customer. And I’ll bet, if one of these drivers picked up, and delivered a pizza, their contract with FedEx would be terminated.
: ) now that would be full service!
My son is a real estate broker too. If your associates work with any other broker, you're home free. If they work strictly for you, you should be handling them as W4/W2 employees. My son has 60 employees. Some qualify to work on a 1099 basis. Most of them don't.
The IRS does collect 1099s. That's why it is critical to get them distributed on a timely basis to the employees working on a 1099 basis.
The IRS doesn't care about the paperwork associated with 1099 contractors. They do care about sole source employers trying to evade tax responsibilities by claiming the employees are contractors rather that employees with a sole employer.
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