He’s the primary American Pope in historical past, however Leo XIV may not have the ability to escape the IRS | EUROtoday

Even although Pope Leo XIV is the primary American pontiff in historical past, he would possibly nonetheless be topic to the Internal Revenue Service and need to file his tax return.

The native Chicagoan and baseball fan will doubtless must get his funds so as with the IRS, like every other American, regardless of his new standing as chief of 1.4 billion Catholics worldwide.

“The U.S. is one of few countries that taxes citizens on income made outside the U.S., so any U.S. citizen living and working abroad will face U.S. tax compliance concerns—even the Pope,” Shivam Malhotra, a companion at Atlanta-based accounting agency Aprio, stated.

“The Pope may be one of the top-ranking religious leaders in the world, but the fact pattern for his U.S. tax liability is still very similar to a U.S. citizen working abroad as a member of the clergy,” Malhotra added.

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U.S. residents residing overseas are required to file an annual tax return until they surrender their citizenship. Because Leo is each a priest and now head of a overseas authorities – the Vatican – his tax scenario is particularly complicated. Leo may have particular tax concerns, however being a member of the clergy doesn’t imply he’s exempt totally.

In basic, U.S. residents residing abroad must file a tax return if their earnings and private circumstances would require them to take action “in the same way as those residing in the United States,” the IRS says.

It doesn’t essentially imply that they might pay the identical quantity in taxes as they might residing within the U.S. For people working overseas and incomes lower than $130,000 within the 2025 tax 12 months, it’s doable that they might owe no U.S. tax in any respect, Wise explains. But not all sorts of overseas incomes qualify for the exemption, together with Leo, as a result of his earnings is earned working for a overseas authorities.

While the pope doesn’t earn a wage, housing, healthcare, meals and journey are lined by the Vatican. The pope may obtain a month-to-month allowance for private bills.

Leo, due to this fact, could also be required to calculate the worth of his earnings.

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“If he did accept his allowed salary, and if it weren’t already exempt due to his diplomatic status, it would fall well under the threshold for the foreign earned income exclusion,” Malhotra stated. “And although the value of his lodging would not be eligible for the foreign earned housing exclusion, tax rules for clergy would still allow him to exclude that value from his income. However, the value of his food and transportation could, theoretically, be taxable.”

Experts informed the Washington Post that Leo’s scenario is “brand new territory” for the IRS and the Vatican, given America’s “far-reaching” tax legal guidelines.

Edward A. David, an assistant professor at King’s College London’s theology and non secular research division, informed the Post stated the scenario was “unprecedented.”

“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,” David informed the newspaper.

Jared Walczak, a vice chairman of the Tax Foundation suppose tank, additionally informed the outlet that he doesn’t anticipate the pope to finish up paying U.S. taxes.

The extra doubtless consequence, Walczak speculated, is that the IRS will subject Leo a letter privately to handle his scenario, or Congress might go a legislation outlining the tax scenario for the pope.

The Independent has reached out to the United States Department of the Treasury for remark.