Tax authorities in Osaka have uncovered more than 3 billion yen ($26.54 million) in undeclared income for the year from July 2017 by at least 50 residents in Ashiya, Hyogo Prefecture, one of the nation's wealthiest neighborhoods.

The scope of the under-reported income and assets is extraordinary for an area singled out for an intensive tax inspection, according to sources close to the National Tax Agency’s Osaka Regional Taxation Bureau, which covers the city.

Residents who were found to have improperly declared their taxes live in the city’s Rokurokusocho district, an area known for being home to the “super rich.”

In most cases, capital gains earned through converting foreign currencies into yen and parts of inherited properties were not reported.

In some cases, taxpayers disguised and hid their income and assets.

Back taxes, including additional underpayment penalties, are expected to top 1 billion yen combined for those residents in Ashiya.

The discovery comes after the agency set up project teams in Tokyo, Osaka and Nagoya in 2014 to bolster monitoring of the wealthy for attempts to avoid paying taxes.

Since then, taxation authorities’ efforts were expanded to 12 sites across the nation by 2017.

Ashiya and Nishinomiya in the prefecture were chosen for the intensified tax investigation by the Osaka Regional Taxation Bureau.

Twenty-five officials have been assigned since July 2017 for the increased scrutiny of Ashiya residents.

Tax inspections of the affluent population conducted over a year through June 2017 totaled 4,188 cases across the nation, according to the agency.

Of these, under-reporting was found in 3,406 cases, totaling 44.1 billion yen and 12.7 billion yen in penalties.

The agency’s project teams were set up as the well-to-do moved their assets or established firms overseas in an attempt to avoid taxation in Japan.

In Tokyo, the Azabu district and Setagaya Ward were the targets of intensive inquiries.