Recently in Class 3 SOT - Dealers Category

August 3, 2013

ATF Electronic Forms Available for Form 1, Form 4, and Form 5

ATFonline.jpgFFL holders: get on it so you're squared away for your customers!
Gun Trusts can use this to submit an ATF Form 1 - 5320.1

"NFA eForms are finally here! ATF is pleased to announce the implementation of the NFA forms into ATF's eForms system. ATF Forms 1, 2, 3, 4, 5, 9 and 10 are currently available for eForms submission.

The submission of Forms 2, 3, 4, 5 and 9 can only be done by a Federal firearms licensee who has paid the special (occupational) tax for the current Tax Year.

If the submission of the form requires fingerprints, photographs, and the Law Enforcement Certification, the submission cannot be done using eForms - the application must be submitted on paper to the NFA Branch.

Accordingly, Forms 1, 4 and 5 may be submitted using eForms if the applicant maker or transferee is a legal entity, such as Gun Trust. The submission of the application will require that the documents establishing the Gun Trust be attached electronically to the application.

This means that the entire Gun Trust as well as any exhibits or attachments mentioned in the Gun Trust will need to be electronically attached to the application.

For Forms 1 or 4 that are submitted with making or transfer tax due, the tax payment will be made through Pay.Gov, just prior to the submission of the application. Pay.Gov is a system, of the US Treasury's Financial Management, that allows the submitter to pay the tax by credit/debit card or from a bank account. For detailed information on Pay.gov you can visit their website at www.pay.gov."

To begin the process you will need to register online with a 12 digit or more password that contains a number, upper and lower case letters, and a non alpha numeric character.
ATFonline-register.jpg

It appears you will also need to register with www.pay.gov to make the payment.
While a Gun Trust can only use the Form 1 at this time, Class 3 SOT FFLs can submit forms to transfer firearms to Gun Trusts but not individuals.

A Gun Trust is a term used to describe a revocable or irrevocable trust that has been customized to deal with the unique issues of firearms ownership, transfer, and possession. Many so-called Gun Trusts have significant problems and are little more than regular legal documents that do not deal with all of the issues involved with the purchase, transfer, and possession of firearms including those regulated by the NFA. To be sure you are getting a Gun Trust and not a regular trust you should contact a Gun Trust Lawyer®. If you have a trust that you would like reviewed for the federal issues, we will review them free of charge and let you know if we find significant issues that could cause problems and create criminal liability if the terms of the trust are followed.

Remember that just because the ATF approves a transfer to a trust, it does not make your trust valid or appropriate to use.

December 24, 2012

An Overview of NFA Gun Trusts? What is a Gun Trust

Many of you have asked your estate-planning lawyer about Gun Trusts and have not been able to find anyone who knows about them. This is not hard to believe because other than some materials I have produced or talked to others about there is no text book on gun trusts.

We work with lawyers in every state to help them prepare gun trusts for clients in their state while providing them a resource for the knowledge and information necessary to understand the ownership, transfer and possession of firearms.

In 2006, I recognized the need to create a Trust for NFA and regular firearms. It was at that time, that I created the Gun Trust. A Gun Trust is based on the traditional concepts of estate planning. Traditional trusts deal with all types of assets that are primarily financially based, but a Gun Trust only deals with firearms. They are not meant to circumvent federal or state laws, as many would have you believe. Trusts were clearly contemplated as owners of firearms by the National Firearms Act. The National Firearms Act (NFA), requires a tax to be paid to own, possess or transfer guns such as machine guns, short barreled rifles and shotguns, silencers or sound suppressors, and AOWs. They are referred to as Title 2 firearms because they are regulated under Title 2 of the 1968 Gun Control Act. Normal firearms are regulated under Title I of the Gun Control Act. Many people mistakenly call them Class 3 weapons, but Class 3 refers to a license or Special Occupational Tax (SOT) that a FFL must obtain prior to buying or selling Title II Firearms.

History of the National Firearms Act

The NFA was passed in 1934 in response to the criminal activity of the time. It imposed a $200 tax on certain firearms thought to be contributing to the growing crime problem. In an effort to discourage possession of these types of firearms, individuals were required to register them with the government and pay a tax of $200. Once this tax was paid, the owner would receive a Tax Stamp for the $200 that would have to be kept with the firearm to identify the owner, who could be in possession, and in what state the firearm could be located. Later the NFA was amended to further restrict certain items called Any Other Weapons ( an "AOW"). The tax to purchase an AOW was only $5 but to build one the tax was the same $200 as with other Title II firearms.

The NFA was designed to have strict requirements and carries stiff penalties for violations. Only an individual, business entity, or trust may own a Title II firearm in the civilian community. In addition, only the owner or their representative may be in possession of that firearm. Illegal possession, transfer, or ownership of a Title II firearm carries a prison sentence of up to 10 years, a fine of up to $250,000, loss of the firearms, and loss of the vessel (vehicle, or home) that the illegal firearms were contained. The NFA defines possession to include loaning so it is important to understand the concept of constructive possession and why individual ownership poses many risks to the average family. Many people mistakenly believe it is ok to let someone else use their Title II firearm if they are close buy, inside a closed fence, hand is on their left solder, or can see them. Even if these were permitted, imagine bringing a silencer home from a gunsmith or range. While you are on the phone your spouse grab your keys to go shopping. Surely you would not believe that this was permitted transfer or possession of a Title II firearm without pre-approval and paying the Tax. A Gun Trust can help protect and manage Title II firearms from these common issues.

ATF Requirements

Title 2 firearms must be registered with the ATF through application process. Whether you are purchasing a Firearm from a dealer with a Class 3 SOT or building your own Title II firearms, you must first go pay and obtain approval from the ATF to have it transferred or to build the firearm. For an individual the ATF requires that you fill out the appropriate form, affix a two-by-two inch photograph of yourself along with fingerprints, and have the application signed by your local chief law enforcement officer (the "CLEO") In addition you must include the tax fee which is typically $200 for each Title II firearm. Once the application is approved the person or entity who submitted the application will receive notice and the firearm may then be created or transferred. The approval time may take anywhere from three to six months.

The NFA Gun Trust

NFA gun trusts have become popular in recent years as an alternative to individual registration because of the flexibility they offer after the firearm is purchase as well as not requiring the photos, fingerprints, or CLEO signature. The Gun Trust can allow other managers or trustees of the trust to uses the firearms. State law controls the formalities of creating a trust and while in some cases lesser formalities may be required, it is recommended that you comply with the formalities other states to simplify the process and authorization in the case that you or others involved with the trust do not live in the same state where the trust was created. There are basically four types of people or entities that are involved with a Gun Trust: grantor/settlor, trustee, successor trustee and beneficiary.

The grantor or settlor is the person who creates the Gun Trust to manage who and how and when others will have access to or can use firearms within the Trust. A Trustee will submit the application to ATF but instead of registering the firearm in their name, he or she will list the Gun Trust as the owner. Trustees are also the individuals who will hold the trust property for one set of people during the grantor's life and the beneficiaries after the death of the grantor. Trustees may legally possess NFA weapons in the trust even though they are not listed on the application. In most cases a Trustee should be at least 18 years old (federal law prohibits anyone under 18 buying NFA firearms, and anyone under 21 from purchasing NFA firearms from a FFL with a Class 3 SOT) and not be otherwise prohibited from possessing firearms. A well drafted Gun Trust Lawyer® can craft provisions to allow for minor children to use the firearms with adult supervision. The beneficiary is the individual who receives the trust property upon the occurrence of a defined event that is often the death of the grantor. A well-drafted gun trust will deal with the many issues that arise in the event that one of the beneficiaries is a minor child, immature, or a prohibited person at the time the grantor dies.

Advantages of a Gun Trust

Gun Trusts should be very flexible. While most are established as a revocable trusts there are many advantages to using an irrevocable trust that are not available to a Gun Trust that is revocable. While many irrevocable trust have significant disadvantages, it is possible to intentionally violate tax code and remove the disadvantages. This type of trust is called an intentionally defective irrevocable trust.

Another advantage is that a Gun Trust does not require the Fingerprints, photographs, and CLEO approval. Not only can this speed up the process, but it also is more private.

While business entities have some of the same benefits as a Trust, they often involve yearly expenses, formalities, and are not designed to deal with ownership, transfer, possession, and use of firearms like a Gun Trust.

While many Gun Trusts are not designed to protect your firearms for generations or from creditors of yourself or your family, there is a Professional version of the Gun Trust that is designed to do both. If you are concerned about giving children and future family members that ability to use firearms if it should become illegal to transfer these firearms later or what to protect your guns from creditors, you should ask about the Multi-Generational Asset Protection Gun Trust.

Top 12 signs that you may not have a real gun trust.

1) You were told to put only NFA firearms in your trust
2) Your Trust talks about real estate, stocks, your house, and guardians of children
3) Your trust instructs others to break the law if you become incapacitated or die.
4) Your trust allows You to dissolve your trust without any prior actions
5) Co-Trustees are listed right in your trust document
6) Your Trust uses a Schedule A
7) Your Trust requires the sale of your firearms to pay you income if I become incapacitated.
8) Your trust does not specifically allow for the purchase of firearms in the powers
9) You trust does not mention guns, the NFA, Title II, Prohibited Persons, or uses incorrect terms like Class 3 firearms.
10) Your trust did not come with an extensive manual and how to section describing almost everything you could possibly think of.
11) You were told the Gun Trust was designed to circumvent laws.
12) Your trust does not contain a Copyright by Gun Trust Lawyer® David M. Goldman

For more information on whether a NFA Gun Trust or Gun Trust makes sense for your circumstances, use the contact form on this page to receive more information on Gun Trusts.

July 14, 2012

Do I Need a Class 3 License to Buy a Silencer?

A Class 3 license is a license that a dealer obtains to sell Title II Firearms. Many individuals incorrectly confuse the terms Class 3 and Title II. We even see some lawyers making the same mistake. Class 3 SOT is a license to sell. Title II is classification of firearm that a Class 3 SOT may sell.

Title II firearms include silencers, short barrel rifles or shotguns, machine guns, AOWs and destructive devices.

So the answer is no! You do not need a Class 3 license to buy a silencer or other Title II firearm unless you are a dealer and wanting to purchase them for resale. If your documents do not use the correct terms, the people who wrote them may not understand the NFA, ATF and issues relating to the purchase, possession, transfer, and use of Title II firearms.

A real Gun Trust like one created by one of our Gun Trust Lawyers® can easily be recognized because it will be protected by our Trademarks and Copyrights.

June 8, 2012

Firearms Law and Gun Trust Lawyer® CLE

texascle.jpgMany Lawyers are asking about Gun Trust CLE, I have been working with the Texas Bar on their Firearms Law Seminar. We will be providing some information on Gun Trusts which will be available soon. Attached is the seminar brochure. If you are in Texas they will be covering many topics related to dealing with firearms in the practice of law.

Course Highlights:


  • Firearms Trusts / Gun Trusts - David M. Goldman

  • The Right to Bear Arms in the Post Heller/McDonald World - Stephen Halbrook

  • Self-Defense: Recent Changes to the "Stand Your Ground" Legislation - Massad Ayoob

  • Prohibited Persons and Restoration of Firearms Rights - Stefan Tahmassebi

  • Every Bullet Downrange Has a Lawyer Attached - Ed McConnell

  • Class III SOT - Obtaining and Keeping a Federal Firearms License

  • Concealed Handgun Licenses: How to Get Them and What They Mean

  • Avoiding Malpractice and Ethics Violations in Firearms Matters

  • Self Defense - Recent Changes to "Stand Your Ground" Legislation"

  • Criminal Defense as It Relates to Gun Cases

live
San Antonio
September 28, 2012
La Quinta Convention Center
303 Blum
San Antonio, TX 78205
(210) 222-9181
Register by September 14, 2012 and save $50!


If you want to find out about offering Gun Trusts to your clients Contact Us for more information on how to provide your clients the original Gun Trust created by the Gun Trust Lawyer®

April 20, 2012

Modernizing your M16: Starting With a Pre 86 Transferable Machine Gun

A few weeks ago I purchased a fully transferable M16. Many of our clients have asked me to post some pictures of what this gun is being built into. Almost every replaceable part has been upgraded to the latest modern version while still keeping it legally transferable as a Pre 86 Machine Gun.

One of the first things we did was to replace the stock with a high-tech anti recoil Israeli Stock.
M16stock.jpg


Next build a modern upper with a Side charger much like you would see on a AK47 so that you do not have to take your eye off the scope to load a bullet.


M16SAR.jpg

Then we build a 10.5 " 556 Upper and a 9.5 Inch 300 Blackout Upper.  Until my suppressors arrive we added what appears to be a flame thrower.  Better not stand to close to the end of this barrel or you might get burned.  Actually its suppose to help with rise by allowing gas to be directed from the left and right.  I do not think this will be necessary with the 300 Blackout but on the 556 it help with the natural rise you find in firing a machine gun.

M16-rise.jpg
Then to top everything off we added a holographic scope and a 4x optic that can be flipped out of the way.  So here is a picture of it in a completed form.  Now all I need is the ATF to return my Form 4 so I can take it home.

M16.jpg I would like to thank Lee at GPI Custom Gunworks for building his version of a perfect transferable M16. 


February 23, 2012

NFA Trust Question: I have heard about a one-time $500 Tax For Unlimited Silencer Transfers

First let me say there is no $500 one-time tax for unlimited transfers. There is a $500 yearly fee for a FFL to obtain a Class 3 SOT which allows them unlimited transfers for that year from other dealers for items owned by their FFL. This fee needs to be paid yearly and may be in addition to other fees necessary depending on what the FFL will be doing. If you are interested in setting up a FFL, please Contact Us as we can put you in touch with someone to help you create your FFL and have the systems necessary to not create problems with the BATFE. You can buy cheap products out there that will help create the FFL, but just because you create n FFL does not mean it will be done correctly and you will understand what your duties and responsibilities. Our package helps you protect yourself from unintentional violations.

In regards to personal ownership, it is unfortunate but you, your company, or your trust will need to pay $200 for each silencer you purchase.

January 19, 2012

How Much Does it cost to be a Class III Dealer, Manufacture, or Importer?

Besides complying with the other requirements for being a FFL, if you want to become a manufacture, seller, or importer of Title II firearms there are several licenses you may need. These include the following and the fees are yearly fees.

1. Importer of Title II Firearms $1000.00
2. Manufacturer of Title II Firearms $1000.00
3. Dealer of Title II Firearms $500.00 ( This is the Class III Special Occupational Tax)

If your gross revenues from the previous tax year were less than $500,000 then you may qualify for a reduced rate as follows.

1. Importer of Title II Firearms $500.00
2. Manufacturer of Title II Firearms $500.00

Note: Having a Class 3 SOT license will not permit you to have or use a non-transferable machine gun for personal use. The ATF takes a close look at these transactions and no one should attempt to do this as an inexpensive way to own a machine gun as it could be a very expensive lesson.

January 3, 2012

Domestic Violence, Child Custody, Divorce & Gun Rights

One benefit of using a Gun Trust that is often overlooked is the ease of changing authorized users or managers of the firearms in the event of a charge relating to domestic violence or other Lautenberg amendment violations. We all know people who have been involved in a divorce and had claims of domestic violence or child abuse made to potentially bolster the other spouse's position regarding the divorce, alimony, child custody, or child support. Unfortunately, the way in which your divorce attorney deals with this issue, could cause you to lose your firearms rights. It is very important to make sure your divorce attorney understands these issues or consults with an attorney who does so that you do not lose your rights over a technicality.

More importantly, if you do lose your rights, you may lose your investment in your firearms as they may not be transferable in time to lose them to a confiscation. With a Gun Trust, even though you can be a manager, you do not technically own them. Therefore, if you lose your rights to own or possess firearms, we simply need to amend your trust to deal with the possession issue as you are no longer the owner anyway.

This becomes much more important with Title II firearms (those sold by Class III Dealers) because of the time it takes to transfer these firearms. For more on this you may want to read the Jacksonville Divorce Attorney Blog's article on Domestic Violence and Gun Rights written by Kelley Ryan a Jacksonville Divorce Lawyer.

February 11, 2011

How to purchase a Title II Firearm from an out of state person.

When you are purchasing a silencer, SBR, SBS, Machine Gun, AOW, or DD from an out of state resident there are two ways of accomplishing the transfer.

The first and slower way is to do a Form 4 transfer to a local Class 3 SOT dealer. Once this is approved a tax free transfer can be made from that dealer to one in the purchaser's state and then a second Form 4 transfer can be done from the buyer's dealer to the buyer. This will involved 2 transfer fees and generally each dealer will charge a fee for the paperwork and transfer.

The second method involves transferring it directly on a Form 4 to the buyers Class 3 dealer who is located in the same state as the buyer. Once this is approved a second Form 4 transfer can take place from the dealer to the buyer. This will involve 2 transfer fees and fees from the single dealer. This method should be quicker since the dealer to dealer transfer is eliminated.

December 14, 2010

Thinking of a New SBR? Check out the AAC 300 BLACKOUT

Check out the new 300 AAC Blackout from Advanced Armament Corp.

Introducing the Advanced Armament Corp. 300 AAC BLACKOUT (300BLK). This system was developed to launch 30 caliber projectiles from the AR platform without a reduction in magazine capacity and compatible with the standard bolt.

Full power 123 grain ammunition matches the ballistics of the 7.62x39mm AK, has 37% more energy than 5.56mm M855, and 9% more than 6.8 SPC TAP 110. In fact, from a 9 inch barrel, the 300BLK has more muzzle energy than 5.56mm M855 from a 16 inch barrel. When 300 BLK is used in a 16 inch barrel, it has 23% more energy than 5.56mm M855 from a 16 inch barrel - with much higher-mass projectiles for a more dramatic effect on the target. Or choose subsonic cartridges for optimal use with a sound suppressor - 220 grain Sierra OTM (open-tip match) bullets vastly outperforms a 9mm MP5-SD in penetration and long range accuracy.

Due to the high efficiency of the cartridge, less powder is used than 5.56mm, which results in a rifle that is a comfortable to shoot - even with a short barrel.

Reloading dies available from Forster products, Reamers and headspace guages available from Pacific Tool and Gauge.

October 11, 2010

Alaska Class 3 Dealers

We have also run across a list of some Alaska Class 3 dealers.

Arctic Arms 907-770-7502
Arctic Custom Services 907-376-0703
Arms and Equipment 907-479-4867
B&B Firearms 907-333-9461
R&M Sporting Goods 907-357-9711

If you are a Class 3 dealer or know of other Alaska Class 3 dealers let us know.

If you need help creating or want more information on what an Alaska NFA Trust or Alaska Gun Trust is, Contact Us for more information.

August 3, 2010

Is it legal to take my NFA Firearms on an Airplane (Class 3, Title II)?

Yes it is legal in most instances to travel with your NFA firearms (those sold by a class 3 dealer and often referred to as TItle II firearms). You will have the same restrictions as traveling with a normal firearm but also need to comply with the regulations for interstate travel with a NFA firearm. For more information on transporting NFA firearms across state lines see our ATF Form 5320.20 page.

Remember that they need to be legal in your destination state.

July 6, 2010

Class III Dealers

We are often asked for a list of Class III dealers. There is a website that lists Class III dealers in many states. GunTrustLawyer.com is a sponsor of the site as we have found it to be a useful site to our clients.

June 10, 2010

Looking for a Class III Transfer Agent?

Auction arms has a FFL Finder that may help you find a local dealer to do your Class III Transfers. Check out the FFL Finder.

March 16, 2010

How to deal with NFA and Non NFA Firearms in a Will

Recently I was asked by one of the attorneys I work with about provisions for a will to deal with the NFA firearms that an individual owns outside of their trust. I wrote something on this topic which can be found on my Florida Estate Planning Lawyer Blog in an article How to deal with NFA and Non NFA Firearms in a Will