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October 24 IRS Continues Audit at FedEx GroundFedEx garnered positive headlines for its slanted disclosure that the “IRS withdrew its tentative assessment for tax and penalties” at FedEx Ground for 2002.  Shareholders, FedEx Ground drivers, state tax authorities and other interested parties were not given any more information than what FedEx wanted to leak out. The facts remain: the IRS continues its audit for 2002 and 2004 and 2005 and 2006; the federal courts are still hearing the national ERISA and state claim lawsuits; more than 30 states continue administrative and tax reviews of the employee status of FedEx Ground drivers; the Court of Appeals will consider the employee determination of the NLRB.  If the only implication of the October 22 Form 8-K is that FedEx Ground ultimately writes a smaller check to the IRS, then FedEx won a news cycle but not more than that.  We’ve uploaded the 1991 RPS vs United States of America complaint from the last time the IRS audited the “contractor model” at RPS/FedEx Ground to put some historical perspective on one day’s headlines.
October 09 Purple Promise Now Officially Broken for FedEx EmployeesA group of FedEx Express aircraft mechanics had a chance to ask questions of Fred Smith at the FedEx Corp’s recent shareholder meeting.  After being asked about promises made to employees through the years now broken with the cap and ending of the pension plan at Express, Fred Smith said something shocking to these long loyal employees: “The Purple Promise applies to customers. I will make every FedEx customer experience outstanding. Unfortunately it’s not within my power to make every life experience for YOU outstanding.” Read more at the IBT’s Fedxmx.com web site.