When the white smoke emerged, and Robert Prevost became Pope Leo XIV on May 8, 2025, he didn't just assume the spiritual leadership of over a billion Catholics. He also made history as the first pope to be a citizen of the United States and, thereby, subject to its tax code. That singular detail—his US citizenship (he also holds Peruvian citizenship)—has sparked an extraordinary tax debate: should the new pope renounce his US Citizenship?
According to respected tax attorneys Lewis J. Greenwald and Eric J. Rietveld, the answer is an unequivocal "yes." Their argument, detailed in their Tax Notes article, is grounded in the complex legal and fiscal consequences that arise from being both a foreign sovereign and a US citizen. And while the Vatican may seem worlds away from Washington, DC, the Internal Revenue Service has a global reach.
The Tax Implications of Dual Citizenship
Unlike most countries, the United States taxes its citizens on worldwide income, regardless of where they live or work. In the eyes of the IRS, Pope Leo XIV is liable for income taxes, foreign account reporting, and possibly even estate and gift taxes, in life and in death—an unprecedented entanglement of religious leadership and civil obligation.
Even if he forgoes a salary and directs it to charity, as Pope Francis did, Pope Leo XIV could still face US income tax liability. Why? Because under the tax code, income is generally taxed at the point of entitlement, even if the money is redirected to charity. And the charitable deduction is limited to 60% of adjusted gross income, leaving the remaining 40% taxable.
Pope Leo XIV and all US expats are subject to expensive and burdensome annual US tax filing requirements. Simply not meeting the yearly requirement can result in tens of thousands of dollars in penalties each year – let alone any US tax owing to boot! For example, if Leo has signatory authority or ownership over Vatican Bank accounts and assets, he needs to file annual FBAR and 8938 reports with the Treasury Department reporting those holdings and interests. The Vatican can't be happy about that!
Even if you are not the spiritual leader of one of the world's largest religions, the US tax obligations of citizenship can be a serious concern. The onerous US reporting requirements that vex Pope Leo XIV also generate thousands of dollars in accounting fees – to say nothing of penalties for incorrect filings – for many other US expats. Americans living abroad may also be unable to benefit from foreign tax-advantaged accounts or invest in ETFs and Mutual Funds due to US tax complications. Even a straightforward sale of a principal residence located outside of the United States often generates substantial US capital gains tax, and, for high-net-worth expats, US estate and gift tax may be as high as 40%-65%, making cross-border succession planning a nightmare.
Renunciation: The Safest Path Forward
Fortunately, there's a solution that aligns with precedent. Several prominent individuals, including former British Prime Minister Boris Johnson and former Somalian President Mohamed Abdullahi Mohamed, have renounced their US citizenship after assuming high-level positions in foreign governments. Even the British Royal Family is not immune to the US tax bug affecting members who are US citizens. Prince Archie of Sussex, the son of Prince Harry and Meghan Markle, is a US citizen through his mother and faces the same tax dilemma. While Archie is only six, and one cannot renounce before their 18th birthday, that decision and US tax quandary is upon the Royals.
Although renunciation can be a complex process with numerous pitfalls for the unwary, ranging from an exit tax on your net worth to disbarment from the US for life, with proper planning and legal advice, all such issues can be avoided. Pope Leo XIV, like many other American expats, can almost certainly surrender their US citizenships with no exit tax, minimal compliance burdens, all while being able to go in and out of the US to see family and friends if the renunciation is done correctly. Heck, he can even continue to collect US Social Security benefits after he renounces the right way!
Conclusion: A Papal Priority
Renouncing now, while the pope's financial profile remains modest, offers a streamlined, low-risk departure from a regulatory regime that doesn't suit his new role. As Greenwald and Rietveld conclude, "Given all the questions and uncertainty of being both absolute monarch of a foreign country and subject to the US federal income tax regime, the answer is simple and obvious: Pope Leo XIV, the first pope from the United States, should surrender his US passport and cease being an American immediately."
Where Does That Leave You? A US Expat Who is Not a Pope...
As we've learned, renouncing your US citizenship or terminating your Green Card can be a complex and intimidating process, but you can avoid all the potential drawbacks if you do it the right way. Proper renunciation can relieve you of onerous US tax obligations in life and in death, without requiring you to cut ties with the US entirely. Your heirs will thank you when you are gone! Our team of experienced US tax attorneys and accountants helps between 900 and 1,200 people terminate their US status correctly every year across six continents.
The Exit Interview at the US consulate is a crucial step in the process, where you formally state your intention to renounce your citizenship. Many US expats worry about how the process will unfold under the current administration and beyond, but thorough preparation is essential for a stress-free experience.
If you or a family member is a US citizen or Green Card holder considering renunciation, we invite you to visit our dedicated webpage for more information. This page contains links to register for our upcoming renunciation webinars. You can find one tailored to your geographic location in our events listings.
These webinars thoroughly review everything you need to know about the US citizenship renunciation process and available options, allowing you to make an informed decision about what is best for you and your family.
Feel free to book a consultation with Alex Marino to discuss your situation today. Click here to book your appointment.
Moodys Tax Law is only about tax. It is not an add-on service, it is our singular focus. Our Canadian and US lawyers and Chartered Accountants work together to develop effective tax strategies that get results, for individuals and corporate clients with interests in Canada, the US or both. Our strengths lie in Canadian and US cross-border tax advisory services, estateplanning, and tax litigation/dispute resolution. We identify areas of risk and opportunity, and create plans that yield the right balance of protection, optimization and compliance for each of our clients' special circumstances.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
