MEMPHIS, Tenn. (WMC) - A lawsuit claims FedEx is demanding the United States government to pay more than $89 million in overpaid taxes.
FedEx filed the lawsuit Monday, claiming they overpaid $145,578 in 2018, and $89,006,415 in 2019 in federal income taxes.
Official documents explained that FedEx wants a refund because government rules that exceeded regular authority. The rule stopped FedEx from claiming more than $89 million in foreign tax credits.
Specifically, the rules being disputed are section 965 of the Internal Revenue Code. That code impacts businesses with ownership interests in some foreign corporations.
According to the lawsuit, the rule is, "impermissibly retroactive because it purportedly applies to transactions that occurred before the enactment of the Code section at issue and more than a year before the Final Rule was
published in the Federal Register."
Therefore, FedEx said the rule was “invalid” and the “tax liability was overstated.”
FedEx released the following statement:
“FedEx pays all of its taxes owed to local, state, federal and foreign governments. In 2019 the Internal Revenue Service and Treasury Department implemented a regulation that denies taxpayers the ability to claim credits for certain foreign taxes paid on income earned outside the U.S. This regulation contradicts specific provisions of the Tax Cuts and Jobs Act (TCJA) and Internal Revenue Code that authorize use of those tax credits. We are seeking to have the regulation declared invalid and a refund issued for overpayment of federal taxes made for fiscal years 2018 and 2019.”