Fedex Ground says drivers are independent

PITTSBURGH, Oct. 23 (UPI) -- Shipping company FedEx Ground repeated its claim that its drivers were independent contractors after the U.S. government dropped a large tax claim against it.

The Internal Revenue Service withdrew a $319 million tax claim against FedEx Ground Wednesday, the Memphis, Tenn., Commercial-Appeal reported.

The company said it was "pleased" with the decision, which was based on the 2002 tax year and included possible interest penalties on top of the base sum of $319 million.

"We continue to believe that FedEx Ground's owner-operators are independent contractors and that no loss is probable in this matter," company spokesman Maury Lane said.

"This is huge," said industry analyst Art Hatfield of Morgan Keegan.

"Basically the federal government is saying these people are not employees. I think it's very substantial for the government to come out and say, 'We're withdrawing this.'"

"It's an admission their premise was wrong," Hatfield said.