Better known by its former name Ernst and Young, EY confirmed on Thursday it had been informed of the ongoing probe.
"We take these allegations very seriously and are fully cooperating with the judicial authority," a spokeswoman said, declining further comment.
Prosecutors in Milan suspect Susanna Masi, a former EY tax expert employed as an advisor to Finance Minister Pier Carlo Padoan, of passing on details of confidential discussions and impending decisions of interest to the accountants' clients.
The discussions concerned notably included negotations among a group of EU countries on the proposed so-called Robin Hood tax on financial transactions.
Masi is also suspected of seeking to sway discussions in the ministry in line with the interests of EY clients, in return for payments totalling €220,000 between 2013 and 2015.
The Milan prosecutors are now expected to question Masi and the head of EY Italy, Marco Ragusa, before deciding whether to proceed to formal charges.
Masi's lawyer said his client was prepared to answer police questions in "absolute confidence" she would be exonerated.
Facing calls to make a statement to parliament, finance minister Padoan refused to comment on the case. "I will wait for the judges' conclusions," he said.
One of the global "big four" business services group, London-headquartered EY operates as a network of member firms, each of which is a distinct legal entity in the country it operates in.
It has not been a good week for the Italian arm. On Tuesday, the local Antitrust authority fined it and three other major accountancy firms a total of €23 million for operating a cartel in bids for public consultancy contracts worth €66 million.