Tax Research and Writing

 Carla Neeley Freitag


Avoid Excessive Acronyms in Tax Writing


The Internal Revenue Code contains many multi-word terms that can become a mouthful to say. A common practice is to shorten or abbreviate the wordy term to a group of letters. Whether the use of acronyms* enhances or detracts from the writer's message is debatable.


How to Define Acronyms


In written documents, a complete term is usually written out entirely on its initial use with the acronym following in parentheses. Examples are: Internal Revenue Code (IRC), or ("IRC"), or (hereinafter "IRC"). Throughout the rest of the document, the reader is expected to know that IRC stands for Internal Revenue Code. If the reader forgets at some point, he or she can go back in the document to the first place the term was mentioned.


In lengthy documents, it is helpful to the reader to redefine the acronym if there is a large gap between the first use and the next use. For example, if the acronym is first defined and used on Pages 15 through 25 and not used again until Page 87, it is unreasonable to expect the reader to remember the term for which it stands or where it was initially used. Thus, the acronym should be defined again on Page 87. In a book, it is helpful to redefine acronyms when they are first used in each chapter.


Especially in a lengthy document, it would be very helpful to the reader to include a Glossary of Acronyms. If a reader comes to an acronym that he or she does not remember, it is much easier to look the term up in a glossary than to skim back through the document to locate the initial use of the term


Using Acronyms with Professional Readership


Some tax writers use acronyms to assist, rather than confuse, a reader, particularly if the readership is a professional group which can be expected to be familiar with the acronyms already. For example, if you are writing for a group of attorneys who specialize in tax-exempt organizations, those readers might prefer to see the familiar terminology in acronyms, such as UBIT (unrelated business income tax), UBTI (unrelated business taxable income), UBI (unrelated business income), and DFI (debt-financed income). Publishers may insist on acronyms because the letters take up less space than the words.


Others believe that use of more than one or two acronyms in a single letter or article distracts from the substance of the content. Unless the acronym is one the reader uses frequently, the reader may focus too much on interpreting the acronym and too little on the substance of what the writer is attempting to convey. To take an extreme example, the following are acronyms used in the estate planning field to represent various types of trusts:





Even as an experienced estate planning attorney, I get distracted when reading an article containing more than two or three of these trust abbreviations.


Acronyms Used in the Internal Revenue Code


My practice is to use acronyms only if the acronym appears in the Internal Revenue Code itself. Examples are: IRA (individual retirement account); REIT (real estate investment trust); Archer MSAs (medical savings accounts). Under these circumstances, it might be more confusing to write out the term than to use the acronym.


When Acronyms May Not Be Appropriate


A limited use of acronyms is more suitable for documents which will be used in electronic research. Whether using an index or a search for terms, an electronic search will usually zero in on a specific topic or issue. The researcher encountering an acronym has no idea where the abbreviation was originally defined. The full text of the document is not available on the screen so that the reader can quickly skim back through to locate the initial use.


Avoid excessive use of acronyms especially when writing for lay readers. A layperson confronted with multiple acronyms in a document may just stop reading altogether. For lay readers, it is helpful to coin a shortened term, rather than an acronym, for a more complicated term. For example, in an article about planned charitable giving, a writer may use the terms "unitrust" and "annuity trust" instead of the acronyms "CRUT" and "CRAT."




The use of acronyms is a subject about which reasonable people disagree. Some people are simply more receptive to acronyms than others. Those with military backgrounds, for example, are probably quite comfortable with the use of acronyms in the context of the tax laws. My husband, after twenty years in the Army, even makes up acronyms that he uses in our everyday lives.


The most important job of a writer is to communicate substance to the readers. If acronyms promote that goal, then their use is appropriate. Use of acronyms should be limited or avoided, however, in documents prepared for electronic research, documents addressed to a lay readership, and other contexts in which acronyms would be confusing or bothersome to the reader.


* The term "acronym" is used in this article as a generalized reference to acronyms, initialisms, and abbreviations.



© 2011 Carla Neeley Freitag