The first American pope in history, Leo XIV, faces an unusual administrative challenge alongside his spiritual duties – filing taxes with the Internal Revenue Service.
The Washington Post reports that despite his elevation to spiritual leader of the Catholic Church and head of the Vatican city-state, Pope Leo XIV – born as Robert Prevost in the Chicago area – remains obligated under US law to file annual tax returns as an American citizen living abroad. Unlike his predecessors, the pontiff's nationality creates unprecedented tax complications, according to experts consulted by The Washington Post.
"Recent popes from Poland, Germany and Argentina were not taxed by their home countries," Jared Walczak, a vice president at the nonpartisan Tax Foundation in Washington, told The Washington Post, describing the American pope's accounting situation as "uncharted."
His status as clergy doesn't exempt him from US tax obligations, as The Washington Post explains that American citizens abroad must generally file returns if their income and personal circumstances would necessitate filing while living domestically. Tax experts interviewed by The Washington Post note that while Americans residing in foreign countries can exclude up to $130,000 in foreign earnings from US taxation for the 2025 tax year, this exclusion doesn't apply to income earned working for foreign governments.
The pontiff's compensation arrangement presents unique valuation challenges, according to The Washington Post's analysis. Rather than receiving a formal salary, the Vatican covers Leo's accommodations, meals, travel expenses, healthcare, and provides a monthly personal stipend. The late Pope Francis once explained this arrangement to The Washington Post by saying, "When I need money to buy shoes or something, I ask for it."
Financial experts consulted by The Washington Post believe Leo will likely need professional accounting assistance to determine how these benefits translate into reportable income on a US tax form. However, Walczak explained to The Washington Post that certain elements, like the papal residence, likely qualify for exemption whether Leo chooses the grand Apostolic Palace or the modest Santa Marta guesthouse where his predecessor lived.
"The papal palace is not a taxable fringe benefit," Walczak clarified to The Washington Post, noting that employer-provided housing generally avoids taxation when located on business property and the employee's residence there is deemed "essential" for business operations. Additionally, The Washington Post reports that US tax code grants clerics special "parsonage" exemptions for housing that aren't available to other professions.
Americans residing internationally who pay income taxes to foreign governments can apply those amounts against their US tax liability through the foreign tax credit, The Washington Post explains. This provision may have benefited Leo during his extensive work in Peru, which taxes full-year residents on worldwide income. The publication notes that Leo became a Peruvian citizen in 2015.
Despite these complications, Walczak told The Washington Post he doesn't anticipate Leo actually paying US taxes, suggesting the IRS might issue a private letter specifically addressing his situation. He even speculated to The Washington Post that Congress could potentially enact legislation clarifying the tax status of America's first pope.
The pontiff's position as Vatican head of state introduces additional complications, according to The Washington Post's reporting. Since 2015, the Vatican Bank has operated under a US federal law requiring global financial institutions to report details of US clients' accounts to the IRS, as stated in the bank's 2023 annual report obtained by The Washington Post.
"For customers who are nonresident in Italy, the principles of international tax law are applied. This means that each customer must declare his or her holdings and all derived income in his or her country of tax residence in accordance with the laws of that country," the report explains, as cited by The Washington Post.
US citizens living abroad must also file Treasury Department Financial Crimes Enforcement Network reports when having signature authority over foreign accounts exceeding $10,000 in total value, Brittany Benson, an analyst with H&R Block's Tax Institute, explained to The Washington Post. "This would likely apply [to Pope Leo XIV] if he has signature authority on Vatican accounts," Benson stated in correspondence with The Washington Post.
Edward A. David, assistant professor in theology and religious studies at King's College London, informed The Washington Post that Vatican revenue primarily derives from donations, museum admissions, and global property holdings. David emphasized to The Washington Post the unprecedented nature of this situation, stating: "U.S. tax law is very far-reaching. And while there might be an exemption for heads of state, this is brand-new territory for us and brand-new territory for the United States and the Vatican."
