loophole

noun

loop·hole | \ ˈlüp-ˌhōl

Definition of loophole

(Entry 1 of 2)

1a : a small opening through which small arms may be fired

b : a similar opening to admit light and air or to permit observation

2 : a means of escape especially : an ambiguity or omission in the text through which the intent of a statute, contract, or obligation may be evaded

loophole

verb

loopholed; loopholing; loopholes

Definition of loophole (Entry 2 of 2)

transitive verb

: to make loopholes in

Examples of loophole in a Sentence

Noun

She took advantage of a loophole in the tax law. His attorney has been hunting for a loophole that would allow him to get out of the deal. tried to close a loophole in the new legislation

Recent Examples on the Web: Noun

Closing disclosure loopholes, forcing outside groups to report any campaign spending that’s $10,000 or more to the Federal Election Commission. — Ella Nilsen, Vox, "House Democrats’ sweeping anti-corruption bill HR 1 is getting a Senate companion.," 18 Dec. 2018 The company this week confirmed that its next operating system update, IOS 11.4, will close loopholes that let law enforcement use a tool to bypass security features on iPhones and iPads. — Don Reisinger, Fortune, "Apple's Commitment to Privacy Was On Display This Week," 16 June 2018 Council members debated closing the loopholes in November, but declined to do so. — Steve Harrison, charlotteobserver, "A record number of pedestrians are being killed. The city took action this week. | Charlotte Observer," 25 Apr. 2018 Congress passed a bill closing loopholes in the National Instant Criminal Background Check System that allowed the student to buy firearms even though a Virginia court had ruled him a danger to himself. — Laura Litvan, Bloomberg.com, "Trump’s Retreat Leaves Congress Adrift on Guns," 5 Mar. 2018 As the Journal explains, Taufatofua took advantage of an Olympic loophole that didn’t even require him to ski on snow. — Dan Gartland, SI.com, "Shirtless Tongan Flag-Bearer Qualifys for Winter Olympics," 20 Jan. 2018 Narendra Modi’s government has tried to use legislative loopholes to push the central bank to ease policy. — Andrew Peaple, WSJ, "Modi Mustn’t Flunk His Central Bank Test," 11 Dec. 2018 Some liberal commentators, for instance, urged Obama to use a legal loophole to mint a platinum coin rather than make concessions to Republicans in exchange for raising the debt ceiling. — Andrew Prokop, Vox, "Trump’s free ride from Congress just ended," 7 Nov. 2018 Unfortunately the Trump campaign is using loopholes in the various venues’ blanket performance licenses which were not intended for such craven political purposes, without the songwriters’ consent. — Erica Gonzales, Harper's BAZAAR, "Rihanna Doesn't Want Trump to Play Her Songs at His Rallies," 5 Nov. 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'loophole.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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Last Updated

17 Jan 2019

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The first known use of loophole was in 1591

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More Definitions for loophole

loophole

noun

Financial Definition of loophole

What It Is

A loophole is an exception that allows a system to be circumvented or avoided. It usually refers to legal, taxation, or security strategies that are exploited for personal gain.

How It Works

Loopholes are failures of a system to account for all conditions, variables, or exceptions. To illustrate a legal loophole, consider a local development law that requires even an unoccupied building to pay real estate taxes so long as it receives a certificate of completion. In order to avoid paying taxes, a builder may exploit this loophole and choose not to "complete" the building.

An example of a tax loophole is the tax break for small businesses who invest in "heavy vehicles". The tax break applies if the vehicle is used at least 50% of the time for the business. Business owners may exploit this loophole by upgrading their own vehicles to SUVs, which are considered "heavy" under the tax law, and thereby gain a personal financial advantage.

In most instances, loopholes that lead to excessive abuse are corrected by subsequent regulations and laws.

Why It Matters

While loopholes may save money or allow a purchase that would otherwise not be economical, the use of loopholes is considered questionable. Exploiting loopholes may lead to intensive scrutiny and audits, or even just a feeling of bad faith. For example, a tax payer should be aware when a tax consultant advises of specific tax advantage of whether the advantage is claimed on the basis of an allowable deduction or a loophole.

Source: Investing Answers

loophole

noun