The Uniform Mechanical Code - 1997 Edition indicates in Table 6-4 page 51 that "Within the conditioned space or in basements: return ducts in air plenums" for heating or cooling, no insulation is required.
However, the Mechanical Engineer may specify whatever he deems necessary.(This last statement is not in the code book, only my experience)
Since the return air temperature and humidity will match that of the conditioned space, the return duct does not have to be insulated within the conditioned space. Insulate only supply duct and outdoor air duct.
I understand that if you are in a conditioned space you do not have a problem with condensation on the duct work but are any codes i.e. BOCA that say you have to insulate RA. I have an inspector saying you have to know matter where the Return Air duct is.
The inspector is wrong. Open the code and fax it to him. Many mechanical engineers insulate the return to attenuate sound, definitely not to prevent condensation. Ask him if he needs exhaust ducts to require insulation, and let him think for a second.
