The Hudson Highland Group Inc., a New York-based professional staffing firm, announced Friday it may face an "enforcement action" by the U.S. Securities and Exchange Commission over reporting of sales tax charges and reserves in previous years, according to a filing with the SEC. The company said the SEC issued a "Wells Notice" to it and its chief financial officer that SEC staff plans to recommend that the government regulator take legal action against the company.

The Wells Notice allows the company time to respond to the complaints from the SEC before action is taken. Hudson Highland said it disagrees with the SEC staff's planned recommendation.

According to the filing, the SEC's concerns involve reporting of past due sales taxes from 2001 to 2007 that have already been settled with the states involved. Hudson Highland said that the SEC staff alleges the sales tax concerns weren't properly reported in the company's financial statements for the second and third quarters of 2006, first quarter of 2007 and 10-K report for full-year 2006.

The total amount of past-due sales taxes for 2001 to 2007 was less than $3.9 million, according to the filing.