IRS says Lenox owes $5.7 million for tax refunds it may not be entitled to

Lenox Holdings Inc. in Bristol Borough has designed and produced fine-china tableware for U.S. presidents and vice presidents.

But it’s ruffled feathers in another part of Washington.

The Internal Revenue Service says it “erroneously” refunded the firm $5.7 million and wants the money back, according to a lawsuit the agency filed in federal court in Philadelphia. The complaint, filed May 19, says that the Lenox tax refunds were paid for 2014, 2015 and 2016 based on anticipated financial losses for 2018 and 2019.

The IRS alleges that Lenox did not completely fill out the tax forms, which it filed in 2020, and that the company has not responded to letters seeking more information to justify the refunds. “The IRS made numerous attempts to obtain the missing information ... but the defendant failed to provide requisite information,” the agency said in the court filing.

Richard Rhoads, chief financial officer for Lenox, said Monday that the company has been working with the Taxpayer Advocate Service “to resolve the matter. We have weekly correspondence.” The Taxpayer Advocate Service is an independent organization within the IRS to help taxpayers.

Lenox has not been served with the suit yet, Rhoads said. He declined further comment.

An affiliate of private equity firm Centre Lane Partners purchased Lenox in October 2020. The sale price was not disclosed. Centre Lane Partners also has invested in flatware maker Oneida and glassware manufacturer Anchor Hocking.

Lenox markets its products under the Lenox and Reed & Barton brands. Lenox also manufactures and distributes other brands, such as Kate Spade New York, Marchesa by Lenox, and Brian Gluckstein by Lenox.

The company produced presidential inauguration gifts for the ninth consecutive time in 2021, crafting crystal vases for President Joe Biden and Vice President Kamala Harris. The company was founded in 1889 by Walter Scott Lenox in Trenton. Lenox introduced the popular Ming and Mandarin patterns in the early 20th century, manufacturing them for decades. Online sites still sell replacement used cups and plates in the Ming and Mandarin patterns.

Yet the collectibles market for figurines and ornaments has been weak for years and Lenox has had to restructure to survive. Its top executive said in 2020 that it was focusing on tableware, e-commerce and younger families.

Lenox closed its last U.S. factory, in Kinston, N.C., in 2020 when the pandemic hit, eliminating 159 jobs. The 218,000-square-foot facility was built in 1989 and could produce 15,000 to 20,000 pieces of fine china daily. Lenox also closed its retail stores in 2020.

Lenox operates its headquarters and creative teams based in an office building on Radcliffe Street near the Delaware River in Bristol Borough. The phone number to the building was referred to an 800-number and a worker who was working from home.