The production company behind the pop music duo B’z failed to declare about 840 million yen in taxable income in the two business years through September 1999, industry sources said Monday.

The Tokyo Regional Taxation Bureau imposed about 400 million yen in back taxes and penalties on B.U.M., a Tokyo-based music production company, for intentionally concealing its income, the sources said.

B.U.M. has already paid the necessary tax, including the penalties.

B’z guitarist Takahiro Matsumoto is the president of B.U.M., while vocalist Koshi Inaba serves as director, the sources said.

B.U.M. handles all aspects of the band’s management, including tour planning, band promotion and video production.

According to the sources, B.U.M. concealed its income during the two-year period by using affiliated companies to declare fictitious expenses for concert tours.

A B.U.M. official, who said the affiliates had been investigated by tax authorities, stressed the situation does not involve tax evasion and the company has not been accused of any crime.

The allocated profits of each affiliate have been properly declared, the official said.

B’z has had several hit albums. Its two best sellers, “Pleasure” and “Treasure,” sold more than 10 million copies in 1998.

Inaba and Matsumoto were ranked first and second on this year’s list of top payers of income taxes for musicians.

There has been some suspicion in the music industry surrounding B.U.M.’s failure to achieve significant profits over the past few years.

Concerts by the popular duo invariably sell out the first day they go on sale. B’z tours drew more than 650,000 people to concerts in seven locations in 1999, a period subject to the tax bureau’s scrutiny, the sources said.

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