Chile's Internal Revenue Service, or IRS, announced on Monday that it has tasked a local court to pursue a criminal investigation on President Michelle Bachelet's daughter-in-law, Natalia Compagnon, for alleged tax crimes.

The suspected tax crimes of Compagnon are "related to the filing of maliciously false tax declarations, incorporating false invoices into the accounting of the company (Exportadora y de Gestion Caval ltda.), and illegally reducing the tax base on income that needed to be paid," Yahoo! News reported from Reuters.

IRS' request for an investigation stemmed from allegations that Sebastian Davalos, Compagnon's husband and Bachelet's son, made use of his political connections to obtain his wife access to a $10 million dollar loan, which she then used to earn a quick profit on a real estate deal, Yahoo! News added.

The scandal first surfaced in February 2014 and has negatively affected the Chilean president's reputation and popularity, the news outlet further reported.

Aside from Compagnon, the IRS also requested the court to investigate her business partner, Mauricio Valero Illanes, and four other people for their involvement in the alleged tax crimes, Yahoo! News noted. However, the agency didn't pursue an investigation on Davalos.

Michelle Bachelet's Plummeting Poll Rating

In December, Yahoo! News reported from the Associated Press that Bachelet's overall approval climbed 2 percentage points to 24 percent last November from the previous survey held in August.

Pollster CEP's latest survey, which was conducted on 1,449 people between Nov. 4 and Dec. 6, indicated that 64 percent of Chileans don't trust Bachelet, while 66 percent believed that her leadership is not effective when it comes to addressing crisis situations, the news outlet added.

Bachelet has served as Chile's president from 2006 to 2010 and started her second term in March 2014, Reuters wrote. Her second term of office began with an approval rating of 54 percent and disapproval of 20 percent. Chileans, however, have lost faith in her administration as the nation's economic growth slowed and scandals such as the Davalos issue came into light. These issues have tarnished her message of tackling inequality.

Since she took the presidency for a second time, Bachelet also struggled with environmental disasters, including drought in the south, floods in the northern desert, an earthquake, and two volcanic eruptions, Yahoo! News listed. Her administration is also having a hard time to accomplish ambitious reforms while Chile is swamped with slow economic growth, record-low prices, and decreasing global demand for copper, the country's top export.