Spanish prosecutors have urged for Real Madrid coach Carlo Ancelotti to be sentenced to four years and nine months in prison, alleging that he failed to declare earnings to the tax office, resulting in significant financial losses for the state.

The Madrid state prosecutor's office accused the 64-year-old Italian of withholding over one million euros in undeclared earnings from image rights during 2014 and 2015, causing a substantial deficit in Spain's treasury.

Despite Ancelotti's declaration as a tax resident in Spain, prosecutors allege that he only reported personal remuneration from Real Madrid in his tax returns, concealing additional earnings from image rights and other sources through a convoluted system of shell companies.

Furthermore, Ancelotti is accused of orchestrating the transfer of his image rights to entities outside of Spain without genuine activity, aiming to obscure his financial dealings from Spanish authorities.

According to prosecutors, Ancelotti earned 1.24 million euros in 2014 and 2.96 million euros in 2015 from the sale of his image rights, amounts that were allegedly not disclosed to tax authorities.

While Ancelotti has acknowledged the actions leading to financial losses, negotiations for a settlement with prosecutors to avoid trial and potential imprisonment are underway.

The tax case casts a shadow over Ancelotti's tenure at Real Madrid as his team prepares to face RB Leipzig in a crucial Champions League encounter, holding a narrow 1-0 lead from the first leg.

Spain has intensified efforts to combat tax evasion among high-profile football figures in recent years, with notable cases involving Lionel Messi, Cristiano Ronaldo, and former Real Madrid coach Jose Mourinho.

Ancelotti, renowned for his illustrious coaching career spanning top European clubs, faces the possibility of a trial and legal repercussions amid ongoing investigations into the tax fraud allegations.