FedEx says the IRS will not impose tax penalties for 2004 through 2006 in the package delivery company's long-running battle over the classification of its FedEx Ground drivers as contractors instead of employees.

The IRS also recently withdrew its initial penalty of $319 million plus interest from an audit from 2002.

The company, based in Memphis, Tenn., said in a statement it may be audited for 2007 and 2008. But it doesn't think the IRS will assess tax penalties for those years, either.

FedEx has been sued in a number of states over its classification of drivers. Because they are labeled independent contractors, they don't get health insurance and other benefits afforded to employees.