Abba star Bjorn Ulvaeus has been accused of avoiding paying 87m Swedish kronor (£6.5m) in taxes on the band's hit songs and musicals.
Bjorn Ulvaeus (R) wrote Abba's hits with Benny Andersson
The Swedish government has demanded he repay the money. They say he did not include the correct royalties on tax returns from 1999-2003.
Abba have sold 370 million records and he also co-wrote the musical Mamma Mia.
Ulvaeus's lawyer told a Swedish paper the tax agency did not understand the musician's tax arrangements.
Officials said Ulvaeus handed over his royalties to companies based abroad and used offshore banks to avoid paying tax.
But the tax agency said the deals were sham contracts and Ulvaeus still had access to the money and should have declared it as personal income.
"This has just been a construction to avoid taxes," agency spokesman Jan-Erik Backman said.
"The meaning [behind the contracts] is really something different than what the official papers say."
But Ulvaeus's lawyer Sven Rygaard told the Dagens Nyheter newspaper: "We are pretty convinced we will win this.
"We will explain to the tax authority how this was done. I don't think they have managed to understand how this has worked."
With Benny Andersson, Ulvaeus wrote the band's hits such as Waterloo and Dancing Queen as well as the stage shows Chess and Mamma Mia.
Tom Hanks will turn Mamma Mia into a film, according to reports, while their hits are due to be made available as mobile phone ringtones for the first time.
But Ulvaeus recently said the group would never stage a reunion as their "creativity" together had gone.