The Pope confronts the US taxman: The US state prepares to extract millions from the Vatican

The unprecedented tax headache of America’s first pope

Pope Leo XIV finds himself at the heart of an unprecedented situation that raises complex tax issues. As the first American pontiff in history, he could be confronted with the tax obligations imposed by the United States on its citizens, even those living abroad.

The American exception: citizenship-based taxation

The United States is one of the few nations to tax its citizens on the basis of their nationality, which determines their place of residence. This peculiarity, inherited from the American Civil War, is designed to prevent tax evasion.

All American citizens, even those who have never lived in the United States, must comply with the requirements of the Internal Revenue Service (IRS).

A famous precedent: the Boris Johnson case

This American tax peculiarity had already made headlines with Boris Johnson, the New York-born former mayor of London.

Faced with a request from the IRS concerning the sale of a London property, he had chosen to renounce his American citizenship to avoid these tax obligations.

The pontiff’s special status

The Pope’s situation is particularly complex, as his status is unique. Without a traditional salary, he nonetheless enjoys the benefits of his position: accommodation, meals and services at the Vatican.

The question of his tax classification remains unclear: should he be considered a member of the clergy, an agent of a foreign government or a head of state?

Potential reporting obligations

Although experts believe that the Pope could be exempt from income tax, he could still be required to file a tax return.

The Fatca law could oblige him to declare his authority over Vatican accounts, creating an unprecedented situation where the Holy See would find itself under US financial supervision.

Conclusion

This unprecedented situation may require intervention by the US Congress to clarify Pope Leo XIV’s tax status.

In the meantime, the IRS will probably have to establish a dialogue with the Vatican to define a framework adapted to this exceptional situation, thus marking a new chapter in relations between the Catholic Church and the United States.

Source: Independant

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Jason Wilder

A pop culture aficionado with a sharp eye for trends, Jason covers everything from Hollywood blockbusters to viral internet moments.