A.Joe Tedesco, licensed electrician, certified electrical inspector, and moderator of the jlconline.com electrical forum, responds: According to the latest version of the National Electrical Code, the insulating sheathing is supposed to extend into an electrical junction box at least 1/4 inch beyond the cable clamp (2005 NEC, 314.17[C]). Extending the sheathing, as you suggest, may be effective, but it would certainly need the approval of your local code official. Because heat-shrink tubing isn't specifically designed or approved for this use, per NEC 110.3(B), I personally would not allow this solution.
Nonmetallic-sheathed cable interconnectors can be used to permanently splice or tap 12- and 14-AWG Type NM-B sheathed cable without a junction box. Typically used to interconnect prefabricated, prewired modular structures, some of these devices are also approved for the repair or modification of existing house wiring.
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