The 64-year-old is in his second spell as manager of the Spanish giants, with his first term running from June 2013 to May 2015, before he spent a year out ahead of a return to coaching with Bayern Munich.
Ancelotti has been accused by Spanish state prosecutors of using shell companies to hide parts of his income during his first spell as head coach.
The Italian has been accused of failing to declare income on image rights in both 2014 and 2015, with the total amount said to be €1,062,079 (£907,573).
“He thus pursued the opacity to the Spanish Public Treasury and the concealment of the real beneficiary of the income from his image rights, so that neither he himself nor any of said companies would have to pay taxes on the large amounts received in Spain or abroad,” read the official documentation.
The report also stated “in order to avoid taxation on the income from said image rights” he used a “complex” and “confusing” network of trusts and companies.
According to journalist Edu Aguirre, Ancelotti is ‘calm’ despite the developments, with the experienced manager confident that he has not committed an offence.
The Italian’s lawyers are said to be working on the matter, although there has not yet been an official statement from Ancelotti himself or Real Madrid addressing the accusations.
Ancelotti won the Copa del Rey, Champions League, UEFA Super Cup and Club World Cup during his first spell in charge of Real Madrid, and he has enjoyed more success since returning to Bernabeu in June 2021.
The Italian has won La Liga, the Copa del Rey, the Spanish Super Cup, the Champions League, the UEFA Super Cup and the Club World Cup during his second spell at the helm.
Ancelotti is attempting to lead Real Madrid to two more trophies this season, with the capital outfit currently in charge of the La Liga title race, sitting seven points clear of second-placed Girona at the summit.
Los Blancos are also in a strong position to qualify for the quarter-finals of the Champions League, leading RB Leipzig 1-0 ahead of the second leg of their last-16 contest.
Real Madrid will welcome Leipzig to Bernabeu on Wednesday evening before switching their attention back to domestic action, with Celta Vigo making the trip to the capital on Sunday evening.
