Luiz Felipe Scolari has moved quickly to deny any wrongdoing after the Portuguese government opened an investigation into €7 million of unpaid taxes during the Brazil coach's spell in charge of Portugal.
Scolari, who led the Iberian country's national team from 2003 to 2008, is at the centre of a probe over suspected money laundering of tax due on his salary during his five years in Europe.
Offshorealert.com and Folha de Sao Paulo report that the 65-year-old is suspected of having been involved with companies in the Netherlands, United Kingdom, Bahamas and British Virgin Islands as part of a tax avoidance scheme.
But Scolari has rejected the accusations in a statement released by the Brazilian Football Confederation (CBF) on Tuesday.
"I have filed all my tax returns correctly," said Scolari, who recently named his 23-man squad for this summer's World Cup.
"In every country that I've worked, I've always claimed my income. I'm absolutely sure that I've filed all my tax returns correctly.
"If there's something wrong, it's not with me. The justice system will narrow the facts."
The news comes less than a month before Scolari's Brazil side take on Croatia in the opening fixture of the 2014 World Cup.