FDX: Lawsuit article that reminds of me the HKG FDA...
02-22-2008, 10:43 PM
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FDX: Lawsuit article that reminds of me the HKG FDA...
While I normally find everything on MSN.com quite lame as well as liberal (ie, their "say bye bye to horsepower article" because of a new way to measure fuel economy blah blah blah), it is my browser's homepage. Occasionally I run across one that I actually read.
Below is one from today's slew of articles. This subject has been beat to death, and covered by articles much better and more in depth than this one. However, the part about "are you paying your employer's taxes for them?" really hit home with respect to the Tax Equalization scam for HKG FOs.
I wonder how long it will take the IRS to audit FedEx again after the first round of tax equalization numbers come in, and every single FO files an amended tax return with his own accountant....
Are you paying your boss's taxes?
Payroll taxes that companies ought to pay may be getting dumped on independent contractors, but a case involving FedEx gives workers new ammunition.
By Jeff Schnepper
Just before Christmas, package-delivery company FedEx was slammed with a $319 million tax bill. The Internal Revenue Service ruled the company had misclassified about 13,000 drivers as independent contractors when, the IRS said, they really were employees.
For FedEx, this could get a lot more expensive. The penalties and back taxes are just for 2002. The IRS is still auditing FedEx for 2004 through 2006 (the status of 2003 is unclear). The Teamsters union, which has been pushing this fight, thinks it could ultimately cost FedEx $1 billion.
Perhaps. But FedEx plans to fight this ruling for as long as it takes.
What got the IRS and FedEx into a tussle was the package company's assertion that drivers were contractors who operate their delivery routes as independent businesses, even though the drivers use FedEx equipment, wear FedEx uniforms and work under explicit FedEx rules.
This fight bears watching by employers and workers alike. Big money is at stake.
The government will argue that misclassification of workers deprives it of billions of dollars of tax revenue annually. The Government Accountability Office has estimated the amount at $4.7 billion a year.
The bosses will argue that the ruling upsets precedents in place since the 1990s.
Workers will argue that employers have gone too far in pushing taxes and payroll costs onto them, effectively forcing workers to subsidize their bosses. If the IRS wins, you can bet many more workers classified as independent contractors will try to change their classifications.
Below is one from today's slew of articles. This subject has been beat to death, and covered by articles much better and more in depth than this one. However, the part about "are you paying your employer's taxes for them?" really hit home with respect to the Tax Equalization scam for HKG FOs.
I wonder how long it will take the IRS to audit FedEx again after the first round of tax equalization numbers come in, and every single FO files an amended tax return with his own accountant....
Are you paying your boss's taxes?
Payroll taxes that companies ought to pay may be getting dumped on independent contractors, but a case involving FedEx gives workers new ammunition.
By Jeff Schnepper
Just before Christmas, package-delivery company FedEx was slammed with a $319 million tax bill. The Internal Revenue Service ruled the company had misclassified about 13,000 drivers as independent contractors when, the IRS said, they really were employees.
For FedEx, this could get a lot more expensive. The penalties and back taxes are just for 2002. The IRS is still auditing FedEx for 2004 through 2006 (the status of 2003 is unclear). The Teamsters union, which has been pushing this fight, thinks it could ultimately cost FedEx $1 billion.
Perhaps. But FedEx plans to fight this ruling for as long as it takes.
What got the IRS and FedEx into a tussle was the package company's assertion that drivers were contractors who operate their delivery routes as independent businesses, even though the drivers use FedEx equipment, wear FedEx uniforms and work under explicit FedEx rules.
This fight bears watching by employers and workers alike. Big money is at stake.
The government will argue that misclassification of workers deprives it of billions of dollars of tax revenue annually. The Government Accountability Office has estimated the amount at $4.7 billion a year.
The bosses will argue that the ruling upsets precedents in place since the 1990s.
Workers will argue that employers have gone too far in pushing taxes and payroll costs onto them, effectively forcing workers to subsidize their bosses. If the IRS wins, you can bet many more workers classified as independent contractors will try to change their classifications.
Last edited by skypine27; 02-22-2008 at 10:51 PM.
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