Understanding the Papal Salary Tax Question: What Could a U.S. Citizen Pope Owe?

The appointment of Pope Leo XIV marks a historic moment—he’s the first American-born pope. But this distinction comes with an unexpected complication: the question of whether he must file U.S. income taxes on his papal compensation. Unlike most religious leaders worldwide, a pope holding U.S. citizenship faces unique tax obligations that could significantly impact his income.

The Salary Structure and Its Tax Implications

Pope Leo XIV receives an annual papal salaire of approximately 30,000 euros monthly, equating to roughly $33,000 per month or $396,000 annually. This generous compensation package is standard for modern pontiffs, though historically, many popes have chosen not to claim it. However, the salary structure itself becomes the crux of the tax question.

According to Edward A. David, an assistant professor of theology and religious studies at King’s College London, U.S. tax law maintains broad jurisdiction: “The new pope is unlikely to be exempt from U.S. income taxes. U.S. tax law claims the right to tax all citizens on their worldwide income.” This principle applies regardless of where a citizen resides or the nature of their employment.

Why Religious Exemptions Don’t Apply Here

Many assume that the Catholic Church’s tax-exempt status in the United States would extend to its leader. Timothy Fogarty, an accounting professor at Case Western Reserve University, clarifies this misconception: there is no “blanket exception for religious personnel”—not even for diplomats or heads of state.

While churches themselves are exempt from U.S. taxation, this exemption doesn’t automatically shield individual clergy members from personal income tax obligations. The distinction is crucial: organizational tax status differs from individual income tax liability. For someone in Pope Leo XIV’s position, citizenship trumps both religious status and Vatican sovereignty.

Calculating the Potential Tax Burden

If Pope Leo XIV were to claim his full papal salaire, the tax implications would be substantial. His $396,000 annual income could result in approximately $135,287 in combined federal and state self-employment taxes. This calculation assumes no deductions or credits, which would be the worst-case scenario.

The self-employment tax designation is significant because clergy members are generally classified this way for Social Security and Medicare purposes in the U.S. tax code. This classification actually provides some relief through available deductions.

Available Tax Deductions and Relief Options

Despite the substantial tax figure, Pope Leo XIV would have legitimate deductions available. First, he could claim the standard deduction of $14,600, reducing his taxable income immediately. Additionally, as a clergy member potentially considered self-employed, he might deduct housing-related expenses associated with Vatican-provided accommodations—potentially including furniture, utilities, and maintenance costs.

The ability to write off legitimate business expenses related to his role could further reduce his final tax liability, though the exact amount would depend on documented expenses and IRS guidelines for clergy members.

Additional Complications: Foreign Accounts and Reporting

An overlooked complexity arises from Pope Leo XIV’s relationship with Vatican financial institutions. U.S. citizens holding foreign accounts face stricter reporting requirements. If his role involves signing authority for Vatican Bank accounts—which held over $6.1 billion as of 2023—he may need to file Form 8938 with the IRS and potentially submit a Foreign Bank Account Report to the Treasury Department’s Financial Crimes Enforcement Unit.

These requirements exist specifically to prevent offshore tax evasion, though complying with proper filing procedures protects him from penalties. The Vatican’s financial holdings, while substantial, don’t change his individual tax obligations.

Will He Actually Pay?

Here lies perhaps the most important detail: while Pope Leo XIV is entitled to his papal salaire, few popes actually claim it. His predecessor, Pope Francis, notably declined to accept the salary, choosing instead to direct it to charitable purposes. This personal choice represents a practical way to sidestep the entire tax question.

The reality is that paying U.S. taxes as pope remains an unprecedented situation. Whether Pope Leo XIV chooses to claim his salary—and thus trigger tax obligations—or follows the recent precedent of declining it remains his decision. Either way, as a U.S. citizen, he cannot completely escape IRS oversight and filing requirements.