Mr Garzon is one of six investigating judges for Spain's National High Court
Spain's most prominent judge is under investigation for allegedly failing to declare he received a salary from a US university during a paid sabbatical.
The General Council of the Judiciary said it was looking into why Baltasar Garzon did not say he was paid $203,000 by New York University in 2005-2006.
Mr Garzon has "emphatically" denied that he acted "in bad faith or with a desire to conceal" his remuneration.
If found to have broken council rules, he could face disciplinary action.
A spokesman for the judicial oversight board, Agustin Zurita, said punishments for failing to inform it of any external salary received during a sabbatical could range from a fine or suspension to dismissal.
Sources close to Mr Garzon told Spain's Efe news agency that "had he intended to conceal [his] income, he would not have declared every last dollar to the US Treasury, as he did".
The judge then "consolidated his income statement to the Spanish Treasury", and "the taxes applied" were deducted "from the gross sums received", they added.
Mr Garzon is one of six investigating judges for Spain's National High Court, which operates an inquisitorial system, as opposed to the adversarial system used by the US and UK.
He came to prominence in the late 1990s, when he campaigned for the extradition of former Chilean military ruler Augusto Pinochet, from London to Spain for human rights abuses.
Spanish Justice Minister Mariano Fernandez Bermejo resigned last month after being criticised for going on a hunting trip with Mr Garzon while the judge was handling a politically sensitive investigation into alleged corruption in the opposition Popular Party (PP).
Mr Garzon has named Francisco Camps, head of Valencia's regional government, as one of a dozen PP members suspected of taking bribes or gifts from businessmen, who also allegedly funnelled money into party funds. PP mayors and ex-mayors were also accused.