loophole

noun loop·hole \ ˈlüp-ˌhōl \

Updated on: 12 Apr 2018

Definition of loophole

1 a : 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

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Examples of loophole in a Sentence

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 of loophole from the Web

The Democrat senators introduced four bills that would require universal background checks, raise the minimum age to purchase a firearm to 21, require all guns to be registered with local law enforcement and close the gun show loophole.

— byron mccauley, Cincinnati.com, "A former police officer, now a senator, proposes gun legislation," 27 Mar. 2018
Perhaps that means finding a loophole in the constitution, or changing it, or building a new structure of the state.

— mikhail zygar, Time, "Putin Believes He's Destined to Make Russia Great Again. And He's Just Getting Started," 19 Mar. 2018
For starters, the state Legislature should close the gun show loophole and ban assault weapons in Oregon.

— letters to the editor, OregonLive.com, "Student advocates point the way: Letter to the editor," 13 Mar. 2018
Schiavoni said the gun show loophole - where private parties such as at gun shows do not have to perform a background check during a sale - needed to be closed.

— cleveland.com, "Ohio Democratic governor candidates spar in fourth debate," 8 Mar. 2018
Those in favor of stricter measures lament its lack of a ban on semi-automatic weapons, expanded background checks and proposals to close the gun show loophole onchecks and waiting periods.

— editors, USA TODAY, "5 things you need to know Wednesday," 7 Mar. 2018
Trump favors adding mental-health information to the NICS system and does not support closing the gun-show loophole.

— Bloomberg.com, "What to Expect in the U.S. Gun Debate—This Time," 28 Feb. 2018
No concrete legislative solutions: no closing of the gun show loophole, no federal approval for universal background checks, and no ban on bump stocks.

— brittany wheaton, Teen Vogue, "Arming Teachers Is Not a Solution," 26 Feb. 2018
Data from Pew research shows that the majority of NRA members are in favor of universal background checks, closing gun show loopholes and preventing the mentally ill from purchasing weapons.

— michael harriot, The Root, "There’s a Theory That Black People Buying Guns Could Stop the NRA’s War on Kids; It Won’t," 21 Feb. 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.

Origin and Etymology of loophole

¹loop

NEW! Time Traveler

First Known Use: 1591

See Words from the same year

Other Legal Terms

actionable, alienable, carceral, chattel, complicity, decedent, larceny, malfeasance, modus operandi

loophole

verb

Definition of loophole

transitive verb

: to make loopholes in

First Known Use of loophole

1664

Financial Definition of LOOPHOLE

loophole

noun

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