FedEx will meet with the Internal Revenue Service audit team in the spring to discuss a tax assessment regarding the classification of owner-operators at FedEx Ground.

On Dec. 20, the IRS tentatively concluded that FedEx Ground's pick-up-and-delivery owner-operators should be reclassified as employees for federal employment tax purposes. The IRS indicated that it anticipates assessing tax and penalties of $319 million plus interest for 2002. Similar issues are under audit by the IRS for calendar years 2004 through 2006.

FedEx said Dec. 21 that it would vigorously defend its position that the drivers are independent contractors. On Jan. 3, the carrier said it is preparing an initial response for a meeting with the audit team. The company said it expects final resolution to take a long time.