NFA Gun Trust Lawyer Blog

Last week there was an issue where an individual was contacted by the ATF in an effort to seize his Title II firearms because of an irregularity with his Trust. A Gun Trust Lawyer reviewed, amended, and restated the trust in question, creating a valid and enforceable trust that deals with the unique issues of NFA Firearms ownership, transfer, and possession. The BATFE had a justifiable reason to pursue the forfeiture action and the original reports on the subguns forum were accurate. After discussions with the BATFE and presentation of a valid Trust the BATFE decided to cease and desist their forfeiture action at this time and the individual is no longer in jeopardy of having his items seized, being arrested, or being fined.  The BATFE and individual have requested that the details not be disclosed.  The BATFE does not want to jeopardize similar ongoing investigations involving invalid trusts.  We can state that the issues involved with this action have been covered elsewhere on this website.

If you created a trust with Quicken or Legal Zoom, you should follow Legal Zoom's and Intuit's advice and have your trust reviewed by an attorney to avoid potential problems. The creators of these programs did not anticipate that individuals would be using the documents in situations that could result in criminal liability.

You may choose to have the trust reviewed to determine if the trust is valid, or reviewed to see if there are issues with the NFA that are not dealt with in your trust, but either way it is important to have your trust reviewed by someone who is familiar with estate planning as well as the NFA.

Joshua Prince alerted me to a blog post on a developing situation he ran across on Subguns where an individual used Quicken to attempt to create a trust for NFA purposes.  Unfortunately the BATFE has now decided that his Quicken trust was invalid and is seeking to seize his MAC-11 and Silencer.  He could also be subject to a prison sentence of 10 years and $250,000 in fines.

This is a very unfortunate situation that could cost the individual severely. Its important to remember that just because the ATF approves your transfer, it does not mean that you are legally in possession.  This is the second situation involving invalid trusts and the ATF that we have seen this month. It looks like the ATF is beginning to look more closely at the trust documents they are receiving.

If you created a trust for NFA purchases in Quicken, Legal Zoom, or used another generic trust that was not reviewed before buy a lawyer before submitting it to the BATFE, you should contact a NFA trust attorney to review your trust for validity.  If you need help finding a local NFA Trust Lawyer we can help.  We work with attorneys in more than 40 states including Florida Gun Trust lawyers and South Carolina NFA lawyers to help review and create valid NFA trusts.

Note: At this time the link to the subguns has been taken down because of questions.  We believe this posting is authentic based upon correspondence with the individual but will update this post as the situation and our agreement with the individual (if any) allows.

The National Firearms Act defines what is criminal conduct.  The prohibited activities include but are not limited to:

1. Engaging in the business of firearms (manufacturing, importing, selling) without a license and tax;
2. Receiving a firearms in violation of the act;
3. Possessing a firearms in violation of the NFA;
4. Receiving or possessing a firearms not registered to yourself in violation of the NFA;
5. Transferring or making a firearm in violation of the NFA; or
6. Removing, changing, or obliterating a serial number of an NFA firearm.

Many individuals are under the mistaken belief that they can allow someone to shoot their NFA firearm when in their possession.  Although a dealer license allows this, the individual license does not and both individuals would be in violation of the NFA and subject to the criminal penalties as such.

If you would like someone else to be able to use or be in possession of your NFA firearms, you should consider a NFA gun trust or business entity to purchase or hold the item in.  For more information Contact a NFA Lawyer.

Violations of the NFA are punishable by 10 years in prison, forfeiture of all devices or firearms in violation, and the individuals right to own or possess additional firearms in the future.  In addition, there is a penalty of $10,000 for each of certain violations.

In addition, a willful attempt to evade or defeat a tax imposed by the National Firearms Act is also a felony which is punishable by up to 5 years in Jail and a $100,000 fine under the tax evasion statutes.  This penalty could be increased to $250,000 for individuals and $500,000 for corporations.

This means you could be looking at a maximum of 15 years in Jail and $510,000 in penalties for a violation.   Many violations can be avoided by proper ownership and knowing who can be in possession and use the Title 2 firearms which are restricted under the NFA.

There may be additional state penalties in addition to the federal one mentioned above.  A properly constructed NFA trust is the best way to own these items and permits the best flexibility as to possession and use.  Although a Revocable trust can provide benefits many individuals create invalid trusts or trusts that do not address the specific issues that relate to NFA weapons ownership and subject themselves to potential violations. 

To create a Valid NFA Firearms Trust that addresses your specific family situation, please CONTACT A NFA lawyer.

Some NFA firearms collectors, who are not engaged in any firearms business, have been known to acquire a GCA license to deal in firearms and pay the NFA special tax to acquire NFA firearms for their personal firearms collections. This is not a wise thing to do and violates the National Firearms Act.

Most individual acquire NFA firearms for the following reasons:

(1) to acquire firearms from nonlicensees residing out-of-state;
(2) to circumvent requirements imposed on individuals to provide their fingerprints and photographs in order to receive NFA firearms and law enforcement certifications authorizing their receipt of such firearms;
(3) to purchase and use items that they are not legally able to obtain as an individual; and
(4) to avoid NFA transfer tax on firearms they receive from FFL's/SOT's.

Warning: These transactions violate the NFA and can only lead to trouble for the individual. In these instances, the individual has committed Federal felonies by falsely stating on a license application and special tax return that the collector intends to conduct a firearms business. Any NFA firearms received tax free by the collector are subject to transfer tax and the collector's receipt of the firearms tax free violated the NFA. As held in ATF Ruling 76-22, these transfers are unlawful and the firearms received are subject to seizure and forfeiture.

If you hold NFA restricted firearms that are of a personal use in nature, under a business license, you should consider creating a NFA Firearms Trust to hold the title to these items to avoid being in violation of the National Firearms Act.

We have associations with lawyers and attorneys in Pennsylvania.  These Pennsylvania Gun Trust Lawyers can provide NFA gun Trusts for the entire state of Pennsylvania.  A NFA Gun Trust can help protect individuals and their families from the criminal and civil penalties associated with the improper transfer or possession of a class 3 firearm regulated under the National Firearms Act.  In addition, the process of purchasing a silencer, SBR, or machine gun can be significantly reduced in the amount of time required and paperwork that is required.

They have offices in

• Allentown Pennsylvania;
• Bechtelsville Pennsylvania;
• Camp Hill Pennsylvania;
• Exton Pennsylvania;
• Pottstown Pennsylvania;
• Lancaster Pennsylvania;
• Lebanon Pennsylvania;
• North Wales Pennsylvania;
  
• Pottstown Pennsylvania; and
  
• Reading Pennsylvania

If you are located in another area of Pennsylvania they can also provide services by email and telephone in much the same way as if you were in their office.

To contact a Pennsylvania Gun trust lawyer fill our our Contact form.

Violators may be fined up to $250,000, and imprisoned up to 10 years, or both.

In addition, any vessel, vehicle or aircraft used to transport, conceal or possess an unregistered NFA firearm is subject to seizure and forfeiture, as is the weapon itself.

THE NATIONAL FIREARMS ACT
TITLE 26, UNITED STATES CODE, CHAPTER 53 INTERNAL REVENUE CODE

The National Firearms Act (NFA) is part of the Internal Revenue Code of 1986. All administration and enforcement of the Internal Revenue Code, with the exception of the NFA, is by the Secretary of the Treasury. The ATF administration and enforcement was transferred to the Department of Justice under the Homeland Security Act of 2002.

Teh Attorney General is now in charge of all administration and enforcement of the NFA, were transferred to the Attorney General. The definition in Section 7801(a)(2), Title 26, V.S.C., we chagned to provide that references to the term "Secretary" or "Secretary of the Treasury" in the NFA shall mean the Attorney General.

Chapter 53 - Machine Guns, Destructive Devices and Certain other Firearms is broken in to several sections
Subchapter A Taxes
Part I Special Occupational Taxes

§ 5801 Imposition of Tax
§ 5802 Registration of importers, manufactures, Dealers

Part II - Tax on transferring firearms

§ 5811 Transfer Tax
§ 5812 Transfers

Part III - Tax on making firearms

§ 5821 Making Tax
§ 5822 Making

Subchapter B General Provisons and Exemptions
Part I - General Provisions

§ 5841 Registration of firearms.
§ 5842 Identification of firearms.
§ 5843 Records and returns.
§ 5844 Importation.
§ 5845 Definitions.
§ 5846 Other laws applicable.
§ 5847 Effect on other laws..
§ 5848 Restrictive use of information.
§ 5849 Citation of chapter.

Part II - Exemptions.

§ 5851 Special (occupational) taxes.
§ 5852 General transfer and making tax exemption.
§ 5853 Transfer and making tax exemption available to certain governmental entities.
§ 5854 Exportation of firearms exempt from transfer tax.

Subchapter C - Prohibited Acts

§ 5861 Prohibited acts.

Subchapter D- Penalties and Forfeitures

§ 5871 Penalties.
§ 5872 Forfeitures.

Download The National Firearms Act in PDF

The National Firearm Act of 1934 was enacted in reaction to activities of gangsters and outlaws of the time. The original law was passed as tax legislation in order to discourage ownership of certain firearms and destructive devices without creating an outright prohibition of the items. The tax on the weapons of $200 was a substantial amount of money in 1934. Because criminals were unlikely to register their NFA weapons, the government was able to use the possession of the weapons without proper tax as a tool to arrest and stop criminal activity. At the time the enforcement of the NFA was the responsibility of the Department of the Treasury.

The National Firearms act controls the ownership, transfer, and possession of a limited set of devices which include machine guns, silencers, short barreled rifles, and short barreled shotguns by requiring federal registration and a tax stamp for each device owned or transfered. The tax stamp is acquired in the registration process and requires specific paperwork. This paperwork referred to as a form 4 or form 1 typically requires a signature of local law enforcement, fingerprints and a payment of the $200 tax. Later the tax on 'any other weapons was changed to $5. The tax is payable at manufacture and each time the NFA device changes ownership except when it is inherited or a dealer acquires the device.

The NFA also required serial numbers on firearms and made it unlawful to alter them. The process had the effect of registering all manufacturers, importers, and dealers.

In 1986, the Firearm Owners Protection Act made the manufacture of new machine guns for the non-government agencies illegal. Machine guns manufactured prior to 1986 can continue to be bought and sold. The limited supply of these devices has cause the prices to rise on a yearly basis.

Currently the National Firearms Act is administered by the National Firearms Act Branch of the BATFE or the ATF as it is often referred to.

The National Firearms Act (NFA) Handbook is available to download.

The NFA Handbook is not available in a printed version any more You may download the entire book (9MB) or its individual chapters

Chapters:
• Chapter 1 - Introduction
• Chapter 2 - What Are "Firearms" Under the NFA?
• Chapter 3 - Registration of NFA Firearms
• Chapter 4 - Taxes Imposed by the NFA
• Chapter 5 - Qualifying to Do Business in NFA Firearms
• Chapter 6 - Making NFA Firearms By Nonlicensees
• Chapter 7 - Manufacturing NFA Firearms
• Chapter 8 - Importing NFA Firearms
• Chapter 9 - Transfers of NFA Firearms
• Chapter 10 - Collectors of NFA Firearms
• Chapter 11 - Exportation of NFA Firearms
• Chapter 12 - Recordkeeping
• Chapter 13 - Required Reports and Notifications to ATF
• Chapter 14 - Going Out of Business
• Chapter 15 - Penalties and Sanctions


Appendices -
• Appendix A (NFA, 26 U.S.C. Chapter 53)
• Appendix B (Rulings and ATF Articles)
• Appendix C (ATF Forms)
• Appendix D (Sample Form Letters)