FedEx Prevails in IRS Audit of Independent Contractors

Skadden successfully represented FedEx Corporation in an IRS examination of the classification of FedEx Ground's package pickup and delivery contractors. Prior to Skadden's involvement, the IRS had proposed a $320 million adjustment for 2002 consisting of employment taxes and penalties, with the prospect of similar liability amounts in all later years. Skadden persuaded the IRS to re-examine the issue. Ultimately the IRS withdrew its proposed adjustment completely and agreed it would not challenge FedEx's historical treatment of the contractors.