Following up on my previous post, Will Tax Complexity Force Pope Leo To Renounce His U.S. Citizenship?:  Libin Zhang (Fried Frank, New York), Papal-American Tax Problems and a Solution, 187 Tax Notes 2093 (June 16, 2025):

On May 8 the College of Cardinals elevated the American-born Robert Francis Prevost to be the newest Pope of the Roman Catholic Church, whereupon he chose the regnal name Leo XIV. Many commentators have noted the Pope’s tax challenges as a U.S. citizen subject to U.S. federal income taxation on worldwide income. Tax practitioners have also considered analogous situations in history and tradition: Prince Albert II, the son of American actress Grace Kelly, renounced his U.S. citizenship before he became the Prince of Monaco in 2005; Thai King Rama IX was born in Cambridge, Massachusetts; American teenager Mia Thermopolis became a princess and heir to the Kingdom of Genovia; American journalist Amber Moore married into the royal family and became a queen of the Kingdom of Aldovia; and American actress Meghan Markle married into a cadet branch of the House of Mountbatten-Windsor based in London.

The Pope’s U.S. federal income tax issues can be mitigated by Vatican City creating and imposing a personal income tax that is substantially similar to the U.S. income tax. The Pope would pay the Vatican City income tax and then use the U.S. foreign tax credit to reduce his U.S. federal income tax to zero. A Vatican City income tax would also allow the city-state to be in the good graces of American tax law professors and government officials who complain about small countries with low or zero income taxes. 

This article does not discuss the practical and theological concerns with a new Vatican City income tax, including whether it would require an ecumenical council or could be enacted by a papal proclamation ex cathedra.

Editor's Note:  If you would like to receive a daily email with links to tax posts on TaxProf Blog, email me here.