The Madrid community prosecutor's office alleged that tax declarations presented by the Italian excluded some of his income, and that this had been done "with the intention of unreasonably evading his obligations to the public treasury".
The indictment said Ancelotti's alleged activity had cost the treasury more than one million euros.
Ancelotti was in charge at Real between 2013 and 2015, at which point he was sacked by club president Florentino Perez.
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