Punctuation

Inthislesson,wefocusonthosepunctuationruleswhere,basedonourexperience,
M.Tx.studentsandtaxprofessionalscanimprovetheirwritingskillsthemost.End
ofthesentencepunctuationisnotusuallyaproblem.However,properuseofthe
nextmostcommonformofpunctuation,thecomma,issometimesmisunderstood.
Writersoftenputcommaswhereitfeelsright,whichmakestheirwritten
communicationdifficulttofollowforthosewhoknowbetter(orfeeldifferently).
Correctuseofthecommacangreatlyincreasetheflowandunderstandabilityofyour
writing.Thus,mostofthislessondealswiththecorrectuseofcommas.Wealso
reviewsomerulesaboutsemicolons,apostrophes,andquotationmarks.

Commas

Tocorrectlyusecommas,youmustfirstunderstandbasicsentencestructures.For
example,thedifferencebetweenindependentanddependentclausesshouldbeclear.
Anunderstandingofthesetermsisfundamentallyimportantindeterminingthe
correctplacementofmanycommas.Ashortglossaryattheendofthislessondefines
theseandothersentencepartsforindividualsneedingarefresheronterminology.
Thecommarulesdiscussedbelowarepresentedinabstractformandimmediately
followedwithseveralexamples.

Commasseparateindependentclauses.Acoordinatingconjunctionfollowsthe
commaandprecedesthesecondindependentclause.Sentencescontainingtwo
independentclausesaresometimescalledcompoundsentences.

CommaRule1: <Independentclause>,<conjunction><independent
clause>.

Example1a: Section162permitstaxpayerstodeducttradeor
businessexpenses,and165allowslossestobe
deducted.

Example1b: Sections162and165permittaxpayerstodeduct
tradeorbusinessexpensesandallowtaxpayersto
deductlosses.(Notethatthesecondclauseisnot
independent,sonocommaappears.)

Example1c: Grossincomeincludesallincomefromwhatever
sourcederived,buttheCodeexcludescertainitems
suchaslifeinsuranceproceeds.

Example1d: TheCodetaxesallincomefromwhateversource
derivedbutexcludescertainitemssuchaslife
insuranceproceeds.(Notethatthesecondclauseis
notindependent,sonocommaisneeded.)

Sentenceswithtwoindependentclausescanbestructureddifferentlythan
suggestedinCommaRule1.Analternativeconstructionthatmaybeappropriate
istoremovetheconjunctionandreplacethecommawithasemicolon.
(Semicolonsarediscussedlater.)Stillanotherpossibilityistoconvertthe
compoundsentenceintotwoseparatesentences.

Example1e: Section162permitstaxpayerstodeducttradeor
businessexpenses;165allowslossestobededucted.
(Cf.,example1a.)

Example1f: Section162permitstaxpayerstodeducttradeor
businessexpenses.Section165allowslossestobe
deducted.(Cf.,example1a.)

Whenadependentclausefollowsanindependentclause,nocommaseparates
them.However,acommadoesfollowadependentclauseintroducingasentence,
identifyingforthereaderwheretheindependentclausebegins.

CommaRule2: <Independentclause><dependentclause>.

<Dependentclause>,<independentclause>.

Example2a: Section151(a)allowsindividualstodeductpersonal
anddependencyexemptionssincetheabilitytopay
taxisgenerallyinverselyrelatedtofamilysize.

Example2b: Sincetheabilitytopaytaxisgenerallyinversely
relatedtofamilysize,151(a)allowsindividualsto
deductpersonalanddependencyexemptions.

Example2c: Section151(a)allowsindividualstodeductpersonal
anddependencyexemptionsiftheyotherwisemeet
allrequirements.

Example2d: Iftheyotherwisemeetallrequirements,151(a)
allowsindividualstodeductpersonaland
dependency
exemptions.

Notethatthedependentclausesintheexamplesabove,sincetheabilitytopay
taxisgenerallyinverselyrelatedtofamilysizeandiftheyotherwisemeetall
requirements,cannotstandaloneasseparatesentences.Commasseparate
adependentclausefromtheindependentclauseonlywhentheformerintroduces
thesentence.

Commasfollowanintroductoryelementprecedingtheindependentclause.
Introductoryelementsmaybeshortorlengthy.Ineithercase,usingacomma
separatesthesentencesintroductionfromitsmainideaand,thus,makesthe
sentenceeasiertoread.
 CommaRule3: <Introductoryelement>,<independentclause>.

Example3a: Whenorganizedabroad,acorporationnotconducting
businessintheUnitedStatesistaxableonlyonU.S.
sourceincome.

Example3b: Duringthemostrecenttaxableyear,thecorporation
redeemed80percentofitsownstockandpaidnotax.

Transitionalexpressionsarespecialtypesofintroductoryelements.Acomma
followstransitionalexpressionsatthebeginningofasentence(thenatural
locationfortransitions).Transitionalexpressions,however,mayoccurlaterin
thesentenceand,inthesecases,oftenareoffsetwithcommas,butnotalways.
Whenindoubt,startthesentencewiththetransitionalexpressionandusea
comma.

CommaRule4: <Transitionalexpression>,<independentclause>.

Example4a: Forexample,Section403(b)contributionscanavoid
taxationformanyyears.

Example4b: Section403(b)contributions,however,canavoid
taxationformanyyears.

Example4c: First,determinewhetherthemergerisataxable
transaction.

Example4d: Determinewhetherthemergerisataxable
transactionfirst.

Example4e: Thus,theexchangeoflifeinsurancepoliciesisa
nontaxabletransaction.

Example4f: Theexchangeoflifeinsurancepolicies,thus,isa
nontaxabletransaction.

Example4g: Also,theadjustedbasisoftheownersinterestin
thepartnershipisincreased.

Example4h: Theadjustedbasisoftheownersinterestinthe
partnershipalsoisincreased.

Essentialclausesandphrasesmustfollowthewordstheymodifyand,thus,never
introducethesentence.Theyarenotoffsetwithcommas.Thewordthatoften
introducesessentialclausesandphrases.

CommaRule5: <Independent<essentialclauseorphrase>
clause>.
 <Independentclause><essentialclauseorphrase>.

Example5a: Individualsthatotherwisemeetallrequirementscan
deductpersonalanddependencyexemptionsunder
151(a).
Example5b: Grossincomeincludesallincomethatisotherwise
excluded.

Example5c: Thecorporationthatexperiencedsixstraightyearsof
netoperatinglossessolditsholdinginStarburst,Inc.

Example5d: MostU.S.citizenswhoestablishforeignresidency
canexcludesomeoftheirearnedincome.(Notethat
whoestablishforeignresidencyisanessential
clause.)

Anothercommonsentencestructureconsistsofanindependentclauseand
anonessentialclauseorphrase.Usecommastooffsetnonessentialclausesor
phrasesunlesstheyfollowtheindependentclause.Thewordwhichoften
introducesnonessentialclausesandphrases.

CommaRule6: <Nonessentialclauseorphrase>,<independent
clause>.

<Independent,<nonessentialclauseorphrase>,
clause>.

<Independentclause><nonessentialclauseor
phrase>.

Example6a: Iftheyotherwisemeetallrequirements,151(a)
allowsindividualstodeductpersonalanddependency
exemptions.(Cf.,example5a.)

Example6b: Section151(a)allowsindividuals,iftheyotherwise
meetallrequirements,todeductpersonaland
dependencyexemptions.(Cf.,example5a.)

Example6c: Section151(a)allowsindividualstodeductpersonal
anddependencyexemptionsiftheyotherwisemeet
allrequirements.(Cf.,example5a.)

Example6d: Unlessotherwiseexcluded,grossincomeincludesall
incomefromwhateversourcederived.(Cf.,example
5b.)

Example6e: Grossincomeincludesallincome,unlessotherwise
 excluded,fromwhateversourcederived.(Cf.,
example5b.)

Example6f: Grossincomeincludesallincomefromwhatever
sourcederivedunlessotherwiseexcluded.(Cf.,
example5b.)

Example6g: NovaCorporation,whichexperiencedsixstraight
yearsofnetoperatinglosses,solditsholdingin
Starburst,Inc.(Cf.,example5c.)

Specialtypesofnonessentialclausesandphrasesmeritseparateattention.Offset
nonessentialappositives,contrastingelements,andgeographicalclarifications
withcommas.Also,theyearportionofdatesgenerallyshouldbeoffsetwith
commaswhenitfollowsthemonthandday;nocommaisusedwhenthedayis
omitted.

Example6h: Dividends,aformofgrossincome,aresubjectto
withholdingunder1441whenpaidtoanonresident
alien.

Example6i: TheCEOspension,atargetedbenefitarrangement,
operatespartlyasadefinedcontributionandpartlyas
adefinedbenefitplan.

Example6j: SnugglesEnterprises,alimitedliabilitycompany,
establishedacafeteriaplanforitsemployees.

Example6k: TheCode,nottheSupremeCourt,istheultimatetax
authority.

Example6l: TheIRS,notthetaxpayer,hastheburdenofproofin
fraudcases.

Example6m: ThefreetradezoneinColon,Panama,isoneofthe
worldslargest.

Example6n: ThemunicipalsecuritiesthatMemphis,Tennessee,
issuedwereprivateactivitybonds.

Example6o: February25,1913,wasthedaythreefourthsofthe
statesratifiedtheU.S.Constitutiontopermitan
individualincometaxlaw.

Example6p: CongressenactedtheIRSRestructuringandReform
Actof1998onJuly22,1998,becauseofalleged
abuses.

Example6q: CongressenactedtheIRSRestructuringandReform
 ActinJuly1998becauseofallegedabuses.

Commasseparatethreeormorewords,phrases,orclausesthatappearasaseries.
Thougheveryonedoesnotagree,omittingthecommaafterthenexttothelast
itemintheseriescanbeconfusingattimes,somostexperiencedwriters
routinelyincludeit.Thus,westronglyrecommendthatyouincludethefinal
commajustbeforetheconjunction.

CommaRule7: <Independentitem,item,<conjunction>item
clause>.

Example7a: Businessexpensesaredeductibleonlyifordinary,
necessary,andreasonable.
Example7b: Under1361(b)(1),asmallbusinesscorporationisa
domesticcorporationthatdoesnothavemorethan75
shareholders,anycorporateowners,anynonresident
alienshareholders,ormorethanoneclassofstock.

Nodiscussionofcommaswouldbecompletewithoutsomementionofwhen
commasarenotneeded.Twoinstancesalreadyhavebeenmentioned.Comma
Rule2indicatedthatnocommashouldseparateanindependentanddependent
clausewhentheindependentclausecomesfirstinthesentence.Also,Comma
Rule5clarifiesthatcommasshouldnotoffsetessentialclausesandphrases.The
overzealoususeofcommasisjustasdistractingasomittingcommaswherethey
areneeded.Instancesofcommazealotryarementionedbelow.

Commasshouldneverseparatetwoindependentclausesthataconjunctiondoes
notjoin.Theresultofacommaspliceisarunonsentence.Tocorrectthe
commasplice,seeCommaRule1.(NOT!meansthecommasuseis
inappropriate.)

CommaRule8: <Independentclause>,<independent
clause>.NOT!

Example8a:
Section162permitstaxpayerstodeducttradeor
businessexpenses,165allowslossestobe
deducted.NOT!(Cf.,example1a.)

Example8b: Grossincomeincludesallincomefromwhatever
sourcederived,theCodeexcludescertainitemssuch
aslifeinsuranceproceeds.NOT!(Cf.,example1b.)

Donotinsertcommasbetweensubjectsandverbs.Whenthesubjectislengthy,
somewritersfeeltheymustprecedetheverbwithacomma,butsuchuseonly
confusesthereader.Carefulattentiontothesentencestructurecandispelthe
temptationtoincludeacommainthissituation.

CommaRule9: <Independentsubject,verbclause>.NOT!
 Example9a: Thecaptiveinsurancecompanyorganizedand
operatedinBermuda,earned$40millionofSubpart
Fincome.NOT!

Example9b:
Theadjustedbasisfordetermininggainorlossfrom
asaleorexchange,dependsonhowthepropertywas
acquired.NOT!

Anothercommonmistakeistoseparatethetwonounsinacompoundsubjector
object.Similarly,acommashouldnotseparatethetwoverbs(orpredicates)ina
compoundpredicate.

CommaRule10: <Independentnoun,<conjunction>noun
clause>. NOT!

<Independentverb,<conjunction>verb
clause>.NOT!

TheIRScollectedinformationaboutthe
Example10a: multinationalcorporationbasedinSweden,andits
Belgiandistributioncenter.NOT!

Example10b: GlobalHarvest,Inc.manufacturesprefabricated
barnsintheUnitedStates,andsellsthemtofarmers
inEastAfrica.NOT!

Semicolons

Writersoccasionallyinsertsemicolonswheretheyareinappropriate.Moreoften,
writersneglecttousesemicolonswheretheyclearlybelong,sometimesusinga
commainstead.Generally,youshoulduseasemicolonbetweenindependent
clauseswithinasentenceifacoordinatingconjunctiondoesnotseparatethem.A
semicolonisparticularlyappropriatewhenthemessageofoneclauseisinsharp
contrastwiththatofthesecondclauseorwhenthesecondclauseclarifiesthe
first.

<Independentclause>;<independentclause>.
SemicolonRule
1:

Example1a: ContributionstotraditionalIRAsaredeductible;
contributionstoRothIRAsarenot.

Example1b: Theeffectivetaxrateisanaveragemeasureoftax
burden;themarginaltaxrateisusedfordecision
making.
Semicolonsalsoareusedbetweenindependentclausesthatatransitional
expressionjoins.

SemicolonRule <Independentclause>;<transitionalexpression>,
2: <independentclause>.

Example2a: Taxcreditsarenolongerallowedforpolitical
donations;however,charitablecontributionscontinue
tobedeductible.

Example2b: Gamblingandwageringincomeistaxable;thus,the
$300woninFridaynightspokergameshouldbe
reported.

Asdiscussedearlier,inCommaRule7,commasgenerallyseparatethedifferent
words,phrases,orclausesinaseries.However,whentheitemswithintheseries
containinternalcommas,semicolonsshouldbeusedtoseparatetheitems.
Usingsemicolonsavoidstheconfusionthatotherwisemightresultfromtoo
manycommas.

SemicolonRule <Independentit,em;it,em;<conjunction>it,em
3: clause>.

Example3a:
IRSregionalofficesarelocatedinAtlanta,Georgia;
Dallas,Texas;NewYork,NewYork;andSan
Francisco,California.

Example3b: Theeffectivetaxresearchermustestablishthefacts;
locate,interpret,andapplytaxauthoritytothefacts;
reachconclusions;andmakerecommendations.

QuotationMarks

Quotationmarksenclosetheexactwordsofaspeaker,book,orothersource.
Bookchaptersandjournalarticlesalsoareplacedinquotes.Theserulesare
familiartomost.However,somewritersareconfusedabouthowquotation
marksshouldbeusedwithotherpunctuationmarks.

QuotationRule Periodsandcommasgenerallyareplacedinside
1: closingquotationmarks.

Example1a: CIRv.GlenshawGlassCompany(S.Ct.,1955)
definedincomeasundeniableaccessionstowealth,
clearlyrealized,andoverwhichthetaxpayershave
completedominion.

Example1b: Thoughtheclientassertedthatthetravelexpensesto
Japanwereordinaryandnecessary,heneverhas
 conductedbusinessoutsideIowa.

QuotationRule Semicolonsandcolonsareplacedoutsideclosing
2: quotationmarks.

Example2a: CIRv.Duberstein(S.Ct.,1960)clarifiedthatagift
mustproceedfromadetachedanddisinterested
generosity;otherwise,itisgrossincometothe
recipient.

Example2b: Thefollowingbusinessexpensesareordinaryand
necessary:salariestoofficers,rentalofthepremises,
anddepreciationofequipment.

QuotationRule Questionandexclamationmarksgoinsidethe
3: closingquotationmarkiftheypunctuateonlythe
quoteandoutsideiftheypunctuatethewhole
sentence.

Example3a: Thequestionfortheactuarytoansweris:Doesthis
retirementplanmeettheminimumfunding
standards?

Example3b: Under162(f),isthepaymentafineorsimilar
penaltypaidtoagovernmentfortheviolationofany
law?

Apostrophes

Generally,apostrophesareusedtoshowpossession.

ApostropheRule Addstomakeeitherapluralnounnotendingins
1: orasingularnounpossessive.Addonlyan
apostrophetoapluralnounalreadyendingins.For
singularnounsendingwithans,sh,orzsound,add
eitheranapostropheorans.

Example1a: TheshareholderexchangedOmegasstockfor
Betasstocktaxfree.

Example1b: Theaffiliatedcorporationsconsolidatedtaxreturn
incorrectlyallowedgrouplossestobedeductedin
full.

Example1c: Ourclientcouldnotbenefitfromthelifetimelearning
creditforhischildrenstuitionbecausehisadjusted
grossincomewastoohigh.

Example1d: MemoriesofProfessorLarkinstaxexamwill
 neverleaveme.

Example1e:
IwillnotsoonforgetProfessorLarkinssemphasis
onwritingskillsfortaxprofessionals.

Contractionsoftensoundlikeotherwords.Asaresult,somepeopleconfusethe
two.Theconfusionisespeciallyunderstandablesinceapostrophesin
contractionsindicatemissingletters,notthepossessiveformasinApostrophe
Rule1.Infact,thewordthatsoundsthesamemaybeapossessivenouneven
thoughitcontainsnoapostrophe!Herearethreeexamplesthatcauseconfusion:

Contraction(with SoundAlikePossessive
Meaning) its
its(itis) whose
whos(whois) your
youre(youare)

Useanapostrophetoshowwherelettersareomitted
ApostropheRule inacontraction.
2:

Example2a: Ifitsasubstantiallydisproportionatedistribution,
302allowstheredemptiontobetreatedasan
exchange.

Example2b: Yourenotentitledtodeductyourmortgageinterest
onallfourvacationhomes.

Example2c:
Thecorporationredeemeditsstockfrom16percent
ofitsshareholders.

Sometimestheapostropheisusedtoformplurals,butonlyinlimitedsituations.

ApostropheRule Useanapostrophetopluralizeletters,numbers,
3: abbreviationsendingwithaperiod,andabbreviations
withafinals.Donotuseanapostrophetopluralize
yearsandabbreviationswithoutperiods(unless
endingins).

Example3a: Rapidtaxlawchangescharacterizedthe1980s.

Example3b: TheCodecontainsmanySubpartAs.

Example3c: Thesocialsecuritynumbercontainedsomany5s
thatItypeditincorrectly.

Example3d: AllourclientshavesixfigureAGIs.
 Example3e: AllourclientshavesixfigureA.G.I.s.

Afterreviewingthislesson,pleasetakethepunctuationselftests.Thesetests
shouldhelpyourecognizeandcorrectinstancesofincorrectpunctuationinyour
ownwriting.

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beforeleavingthiswebsite,pleaseremembertocompletetheshortExit
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Glossary: Parts of a Sentence

Appositive: Anounadjacenttoanothernounthatidentifies,explains,
describes,orrenamesthelatter(e.g.,RandySmith,a
SALTexpert).Canbeanessentialclauseorphrase,butit
isusuallynonessential.

Clause: Groupofwordswithinasentencecontainingasubject
andpredicate(verb).

Coordinating Wordthatconnectswords,phrases,orclauses(i.e.,and,
Conjunction: but,for,nor,or,so,yet).

Dependent Clausethatcannotstandaloneasaseparatesentence;it
Clause: dependsontherestofthesentenceforitssupport.If
extractedfromitssentence,adependentclausewouldbea
sentencefragmentoranincompletesentence.Alsoknown
assubordinateclause.Adependentclausecanbeessential
ornonessential.

EssentialClause Dependentclauseorphrasethatfollowsandlimitsthe
orPhrase: wordsitmodifies.Anessentialpartofthesentencethat
cannotbeomittedwithoutchangingordistortingthe
readersunderstandingoftheindependentclause.
Essentialclausesorphrasesarenotoffsetwithcommas.

Independent Clausethat,ifextractedfromthesentence,wouldforma
Clause: separate,freestandingsentencebyitself.Alsoknownas
mainclause.Allsentenceshaveatleastoneindependent
clause,andsometimestheentiresentenceisan
independentclause.

Introductory Clause,phrase,orwordthatprecedestheindependent
Element: clause.Atransitionalexpressionisaspecialtypeof
introductoryelement.Generallyfollowedbycomma.

Nonessential Dependentclauseorphrasethatcanbeomittedwithout
Clauseor changingordistortingthereadersunderstandingofthe
Phrase: independentclause.Sometimescalledaparenthetical
element,interrupter,ornonrestrictiveclauseandphrase.
Generallyoffsetwithcommas.Atransitionalexpression
isaspecialtypeofnonessentialclauseorphrase.

Phrase: Groupofwordswithinasentencethatdoesnotcontaina
subjectandpredicate(verb).Anygroupofwordsthatis
notaclause.Aphrasecanbeessentialornonessential.

Transitional Wordorshortphrasethatlinkssentencesandsmoothes
Expression: thereadersmovementbetweensentences.Such
expressionsareusedtocontrast(e.g.,however),compare
(e.g.,similarly),conclude(e.g.,thus),summarize(e.g.,for
example),expresspurpose(e.g.,forthisreason),continue
withanadditionalpoint(e.g.,also),orplaceathoughtin
thecontextoftimeorplace(e.g.,later).Aspecialtypeof
introductoryelement.Generallyoffsetwithcommaswhen
introducingasentence.