Why would an inspector fail an outlet not wrapped in tape? It sounds overly picky, but there are some reasons why taping your outlets is a good idea, at least. And I can think of one case where it’s required.
When wrapping outlets in tape is required
When you have an electrical outlet in a metal box, the National Electric Code requires you to protect the box from making contact with the outlet’s terminals. It doesn’t state how you are to do this. It just says to do it.
Far and away the easiest way to keep the outlet’s terminals from making contact with a metal box is to wrap the outlet in electrical tape after you attach the wires. Be sure to do more than one wrap. Three might be overkill, but if it’s my kids living in that house, I’ll give it a third wrap. You should too.
Vinyl electrical tape does degrade over time, but wrapping multiple turns helps to hold that off. Just because the tape won’t last forever doesn’t mean it’s a bad idea. The tape will help for however long it holds on. And I have seen electrical tape I put in place 10 years ago still in good condition when I last checked it.
What about plastic boxes?
Wrapping outlets isn’t required in plastic boxes, since the plastic box is non-conductive. Some people do it anyway. If your inspector fails you for not wrapping outlets in plastic boxes, the guy’s paranoid. Unfortunately some inspectors aren’t happy if they pass you the first time, in my experience.
The practice does no harm, though some people will question how much good it does. In theory it seals out moisture, which will inhibit corrosion, and therefore improve conductivity over the long run. But what’s moisture doing inside your walls? It feels like a reach.
I have heard people say tape is a liability in the case of an electrical fire. But if you’re worried about electrical fires, the right answer is putting AFCI breakers in your breaker box, not leaving off tape. And that logic doesn’t make sense to me. By that logic, wires shouldn’t be insulated at all.
When I think about it, I wrap my outlets whether it’s in a metal box or a plastic one. But it’s more important in metal. In either case, it gives inspectors one less thing to complain about.