What Happens When the Tax Man Cometh for the Pope?
With the election of Cardinal Robert F. Prevost of Chicago as Pope Leo XIV, America has its first-ever Pontiff—and a Chicagoan—in the Vatican. But while Catholics around the world are asking spiritual questions, tax lawyers are asking a different one:
Will the IRS try to collect taxes on the Pope’s in-kind compensation?
It’s not as silly a question as it sounds. Under U.S. tax law, citizens must pay taxes on their worldwide income, no matter where they live. This includes not just wages, but also many forms of in-kind compensation—things like free housing, meals, or even a company car. If you’re an American working overseas and your employer pays your rent or feeds you lunch every day, the IRS typically considers that taxable.
So, what about Pope Leo XIV? After all, he’s now living rent-free in the Apostolic Palace, eating gourmet meals prepared by the Vatican’s chefs, wearing some very fancy vestments, and tooling around in a Popemobile with zero monthly lease. If this were any other American citizen receiving untaxed perks abroad, the IRS would be licking its chops.
Sovereignty Beats the IRS
But…
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