Allofs has been with Bremen for 13 years, but after presenting the worst financial results in the club's history on Monday night, his position at the club no longer seems so solid.
Wolfsburg are on the lookout both for a new coach and a new general manager, and Allofs appears to fit the bill.
However, Allofs has quashed rumours he could make the move during the league's winter break.
"I don't have an offer from Wolfsburg and there have not been any discussions so it is not something I need to deal with," said Allofs.
Bremen's president Klaus-Dieter Fischer says he would know if there was any truth to the rumours.
"We know nothing about it, and given the relationship we have with each other, we would know about something like this," he told the Kreiszeitung Syke newspaper.
Allofs will therefore be taking his place on the Bremen bench alongside coach Thomas Schaaf tomorrow [Saturday], as he has done for the past 13 years.
Their task is to win in Gelsenkirchen for the first time since May 2010, and Schaaf said: "They are a very strong team and that is reflected in the successful season they are playing."
A 2-2 draw with Arsenal in midweek took Schalke onto the brink of qualification for the knockout stage of the Champions League.
"Things are looking good for us right now overall, but it would be a mistake to content ourselves with what we have got," said defender Joel Matip.
"We have played a few games in which we have thrown away the points and we must not forget that."