Articles Posted in National Firearms Act

One of the most common questions Class 3 SOT Dealers ask has finally been addressed by the ATF and should help clear the inconsistent answers given by local ATF offices.
Is a NICS check required when a Gun Trust is used to purchase firearms that are subject to the NFA?

Short Answer: Yes.

Below we explain why we believe that a NICS and 4473 were previously required even if local ATF agents told dealers otherwise. We raised this issue in our Comment to 41P. Perhaps ATF is paying attention to some of the comments that were filed in response to 41P.

ATF’s letter seems to be an interesting admission that appears to contradict their statements as to why the suggested changes mentioned in 41P are necessary.

We have always thought that the 4473 and NICS check should be done when a Gun Trust is used to purchase NFA firearms. Unfortunate there have been many who have reported that dealers were not required to do a NICS check (background check) and only required to complete a 4473 for Gun Trusts. Much of the medias outrage over background checks not being completed for Gun Trusts was over this very issue.

The confusion comes from the instructions on the back of the 4473 form where it states that no NICS check is required for a “person” when purchasing a NFA firearm.

A “person” under the GCA is not defined to include a trust. Under the GCA, 18 U.S.C. § 921(a)(1), a “person” is defined to include “any individual, corporation, company, association, firm, partnership, society, or joint stock company.” This is different than how a person is defined under the National Firearms Act – “an individual, business entity, or trust”. ATF states in their letter that:

ATF has interpreted the GCA exception in sections 922(t)(3)(B) and 478.102(d)(2) to mean that firearms transfers are exempt from a NICS check when they have been approved under the NFA to the person receiving the firearm. Unlike individuals, corporations, partnerships, and associations; unincorporated trusts do not fall within the definition of “person” in the GCA.

Because unincorporated trusts are not “persons” under the GCA, a Federal firearms licensee (FFL) cannot transfer firearms to them without complying with the GCA. Thus, when an FFL transfers an NFA firearm to a trustee or other person acting on behalf of a trust, the transfer is made to this person as an individual (i.e., not as a trust). As the trustee or other person acting on behalf of the trust is not the approved transferee under the NFA, 18 U.S.C. 5812, the trustee or other person acting on behalf of a trust must undergo a NICS check. The individual must also be a resident of the same State as the FFL when receiving the firearm.

When purchasing an NFA firearm, the person acting on behalf of the trust will complete the ATF Form 4473, items 1 through 10b with his or her personal information. Item 11a “Are you the actual transferee/buyer of the firearm(s) listed on this form?” should be answered “YES”. The transferor will conduct the NICS check and complete Items 21a though 21c and Item 21d, if applicable. Item 22 will be left blank, as the transaction is not exempt from the NICS check.

As confusing this may seem, it is really quite simple, an individual does not need the NICS check because of the CLEO signature, and the FBI background check that is run on the fingerprints that are submitted with the ATF Form 4 or Form 1. A Trust, on the other hand, does not need fingerprints or the CLEO and thus the NICS check is required because it is the modern equivalent of the CLEO and fingerprints.

In summary, here is what is ATF is stating is required when a Gun Trust or an individual uses an ATF Form 4 to purchase a NFA Firearm:

Gun Trusts – 4473 and NICS Individuals – CLEO, Fingerprints, photographs, 4473, no NICS (As of May 6th 2014)

If your Class III SOT is not doing a NICS check along with the 4473 when a Gun Trust purchases a NFA firearm you might let them know about the ATF letter below. I am sure ATF will starting looking at these records with inspections in the future.

If you would like a full copy of their letter to Dakota Silencer it can be downloaded here ATF NICS & 4473 Trust Response Letter.pdf

Michigan NFA Class 3 firearms

There are several type of Title II firearms which are sold by Class 3 SOT dealers that are restricted by the National Firearms Act.

Each state can impose additional restrictions on the sale, purchase, and transfer of Title II firearms in addition to the compliance that is required with the National Firearms Act.

In Michigan you can own the following Title II Firearms that are regulated the the National Firearms Act:

Machine Guns
Suppressors
Any Other Weapon (AOW) (only some)
Destructive Devices (DD)
Short Barreled Shotguns (SBS)  (See Below but Legal as of 3/28/14)
Short Barreled Rifles (SBR)  (See Below but Legal as of 3/28/14)

In Michigan you cannot own the following NFA restricted items.

 some AOW’s like Tasers or Stun Guns by private citizens whether or not they are class 3 items or the individual has a CCW permit

The Michigan State Police put together a legal update on SBR and SBS which describes the differences between those over 26 inches and those under 26 inches.
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Hawaii NFA Class 3 firearms
There are several type of Title II firearms which are sold by Class 3 SOT FFLs that are restricted by the National Firearms Act.

Each state can impose additional restrictions on the sale, purchase, and transfer of these Title II firearms in addition to the compliance that is required with the National Firearms Act.

In Hawaii you can own the following items that are regulated the the National Firearms Act

Individuals cannot own any NFA firearms which are kept within HI.
State and county law enforcement officers who are not convicted of an offense involving abuse of a family or household member under 709-906 can own and possess Silencers and Machine Guns and Short Barreled Shotguns (SBS) and Short Barreled Rifles (SBR).

In Hawaii you cannot own the following NFA restricted items.

Machine Guns Silencers*
Machine Guns*
Short Barreled Shotguns (SBS)*
Short Barreled Rifles (SBR)*
Any Other Weapon (AOW)
Destructive Devices (DD)

Follow this link to find out more about Hawaii and NFA restrictions on Class 3 Firearms
Updated 10/18/13

Tomorrow Sarah Gervase, with the NRA is presenting a summary of the major provisions of the NFA just before my presentation of the use of Gun Trusts as we provide many lawyers with information on Gun Trusts I wanted to highlight some of the major points of her talk with some exerts from her paper.

This presentation will focus mostly on individual buyers and transferors, as many of those in attendance at the Firearms Law Seminar have more personal interest in and interaction with individuals who collect or own these arms for their own enjoyment. There will be some basic information for dealers, manufacturers, and importers, however, and a future Seminar presentation can focus on those areas if there is sufficient interest. In the meantime, readers of these materials who need more in-depth information for dealers, manufacturers, and importers are encouraged to review ATF’s website at http://www.atf.gov for the latest relevant requirements.

A quick note about holding a client’s property. Be very careful about holding any firearms owned by a client or about accepting firearms as payment for services. Here’s a horror story. An attorney represented a man accused of bank robbery. The attorney took possession of the allegedly stolen money and a sawed-off shotgun. That attorney was suspended from the practice of law for 18 months for possessing a short-barreled shotgun used in a bank robbery. It was unprofessional conduct to take the fruits and instrumentalities of the crime. In re Richard R. Ryder, 381 F.2d 713 (4th Cir. 1967).
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On Friday May 3, 2013, the National Riffle Association is having The 16th Annual Firearms Law Seminar in Houston Texas. This seminar is primarily focused for lawyers who deal with firearms related issues in the practice. Over the past few years, the ATF has presented the panel on Trusts and ownership of Title II firearms. I have personally been to this presentation several times looking for guidance or changes in the law or its interpretation. Unfortunately the NFA portion of the seminars have been disappointing and have not offered any real guidance in dealing with the many issues that a Gun Trust should deal with. This year the NRA asked me to speak Gun Trusts. I plan on dealing with many of the ethical problems with traditional trusts as well as how to use Gun Trusts to protect your clients firearms from future legislative restrictions as well protecting the guns from loss due to confiscation that often surrounds criminal charges or claims of domestic violence and/or child abuse that often surround divorce.

Many people are still looking for NFA Trusts and have not realized the benefits of a Gun Trust over a trust that only deals with NFA Firearms. Look for more information on the NRA Firearms Law Seminar. For more information about the National Firearms Law Seminar, please call 1-877-NRF-LAWS
If you are a lawyer and plan on attending and would like more information on Gun Trusts or have a question you would like me to address at the seminar, use the contact form and I will try to incorporate it into the Gun Trust Presentation portion of the NRA Firearms Law Seminar.

Today we received another copy of a Gun Store Generic NFA Trust that was provided to a customer of the shop. Not only was it a generic trust and did nothing to advise or protect the client from issues regarding the transfer, ownership, possession or use of TItle II firearms (sold by Class 3 dealers) but the trust itself was invalid as it did not comply with the requirements to create a valid trust in the State. While it may have been a valid trust in another state, each state has its own requirements for creating a valid trust. These requirements change and a trust that may have been valid a few years ago may not be valid under the current laws of the state. It is important to make sure your trust complies with the state’s requirements for creation of a valid trust. What is disturbing is that ATF approved transfers to this invalid trust.

Remember just because ATF approves a transfer, the agency is not stating that your trust is valid nor that you are legally able to be in possession of the firearms. If you have a free trust or a gun shop trust it is important to have it reviewed for legality as well as compliance with the ATF to make sure your document is valid and that your document does not instruct you or others to break the law in regards to regular firearms or those restricted by the NFA.

Gun Trust LawyerFunding a trust is a basic concept that is necessary for a trust to be valid. The legal concept is that the trust does not exist if there is nothing in the trust. A Gun Trust can be funded with a firearm, money, or any other asset. Typically a Gun Trust will be used to acquire firearms and is often used for Title II Firearms. When you put money in or assign money to the trust, you have funded it and it is now valid. If you never assign property to a trust, it can create problems.

For example, if your trust is unfunded, and you purchase a Title II Firearm from a dealer personally you will own it personally. An Assignment sheet may fund the trust, but if the AFT has not approved the assignment or an additional fee is not paid, you may have created a legal problem.

Funding a NFA trust, purchasing NFA Firearms, and proper use of a Gun Trust are very important to understand and something you should ask your Gun Trust Lawyer® about.

NFA Class 3 firearms

There are several type of Class 3 items that are restricted by the National Firearms Act.

Each state can impose additional restrictions on the sale, purchase, and transfer of class 3 firearms in addition to the compliance that is required with the national Firearms Act.

In Missouri you can own the following items that are regulated the the National Firearms Act

Machine Guns
Short Barreled Shotguns (SBS)

Short Barreled Rifles (SBR)

Any Other Weapon (AOW)
Silencers

In Missouri you cannot own the following NFA restricted items.

Destructive Devices (DD)

Follow this link to find out more about Missouri and NFA restrictions on Class 3 Firearms

NOTE: Starting 8/28/2011 you will be able to use a NFA trust to purchase NFA firearms in Missouri without the need of a C & R, FFL, or use of a Corporation or LLC.

doj-seal-color-90x90.jpgThe US Department of Justice today announced that
A man in Berlin, Connecticut, was sentenced to 101 months of imprisonment, followed by three years of supervised release, for illegally possessing machine guns, a sawed-off shotgun, silencers, grenades and improvised explosive devices or IEDs.

These items are controlled by the National Firearms Act and you must purchase them using a Form 4 or manufacture them with a Form 1 and pay the tax. If you are in possession of them, are using them, or sell them without complying with the requirements you can face prison sentences and fines.

A NFA Firearms Trust can help you protect yourself and your family from improper possession and other issues such as constructive possession. Contact a Gun Trust Lawyer® for more information on What a Gun Trust is and how you may benefit from one.

nfatca_logo.gifThe National Firearms Act Trade & Collectors Association (NFATCA) is the only organization that champions the interests of the entire NFA community. It doesn’t matter if you are a collector, a dealer, manufacturer, importer or just an enthusiast. We take on the issues that no other organization would even consider.

If you own or are planning on owning NFA firearms you should consider joining this organization.

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