€9 million in revenue, unpaid taxes and blocked accounts

A law firm based in Slovenia, Senica, has found itself entangled in a financial dispute involving nearly nine million euros in revenues, unpaid taxes, and blocked bank accounts. The firm, which celebrated its 40th anniversary this April, employs 25 people and has long presented a picture of professional success. However, recent developments suggest otherwise, with multiple bank accounts frozen since early May, including one blocked last week. According to publicly available data, the firm currently holds only a fiduciary account open in Slovenia, a special account used to hold clients' funds rather than the firm's own, and three additional accounts abroad. Katarina Kresal, a former president of the Liberal Democracy of Slovenia (LDS) and former internal minister in the government led by Borut Pahor, stepped forward today to address the situation. As a co-owner of the legal practice, she claims the blockades stem from an inspection conducted by the Financial Administration (Furs) in 2020 and 2021. She argues that these actions were unlawful because they failed to consider the Law on Legal Practice, which regulates how lawyers operate. According to Kresal, Furs imposed additional tax obligations and contributions that were deemed illegal due to their failure to apply the relevant legislation. She stated that the firm has already appealed against these decisions, and Furs issued a ruling halting the collection of taxes because it assessed that the appeal had merit. However, the amount related to contributions remained frozen, as such payments cannot be deferred. Kresal emphasized that the firm believes it has already fulfilled its tax obligations and that sufficient funds have been withheld from the blocked accounts to cover outstanding debts. Despite this, she noted that the firm still awaits a decision from Furs regarding a request to reduce the amount paid six years ago, as well as newly made payments that should be considered. She argued that the blockage is unlawful and should not exist under current circumstances. The Financial Administration, which requested the blockage, declined to comment further, citing the confidentiality of tax matters. They indicated that all facts, circumstances, data, decisions, and documents surrounding the case are confidential. This lack of transparency has left the firm unable to conduct business smoothly, as it faces uncertainty over its financial status. Senica’s situation highlights the complexities of navigating legal and tax regulations within the profession. The firm’s ability to continue operating effectively is now in question, given the ongoing disputes and the impact of frozen assets. With the firm relying heavily on its banking infrastructure to manage client funds and daily operations, the freeze poses immediate challenges to its continued functioning. The incident has raised questions about the enforcement of tax laws and the procedures followed by regulatory bodies in handling disputes involving legal professionals. While Kresal insists on the legality of her firm’s position, the Financial Administration maintains its stance grounded in confidentiality. The resolution of this case will likely depend on the outcome of pending appeals and the clarity provided by Furs in its rulings. As the situation unfolds, the firm continues to await a definitive response from the authorities, hoping for a resolution that would allow it to resume normal operations. Until then, the uncertainty surrounding its financial status remains a critical factor affecting its ability to serve clients and maintain its reputation in the legal sector.