NFA Gun Trust Lawyer Blog

While ATF has previously stated that a certification of compliance is not necessary for trusts, they have now changed their mind or at lease in some cases. For this reason we are now recommending that you send in the 5330.20 with your Form 4 or Form 1 application to purchase or make a firearm restricted under the NFA.
We will create a sample Form 5330.20 to review. Here is a link to download a Certification of Compliance with 18 U.S.C. 922(g)(5)(B) ATF 5330.20

When submitting a Form 1 to the ATF for a SBR or SBS with multiple barrel lengths, the ATF will no longer accept a Form 1 with multiple barrel lengths. It is recommended that you submit the ATF Form 1 (5320.1) with a single barrel length for approval. Follow this link for more information on how to fill out an ATF form1 (5320.1).

I was contacted by the firearms dealer offering the Free downloads of the NFA trust and they have removed the links on their website. Since being contacted, by this dealer I have had reports of other dealers in Florida, Texas, Arizona, Utah, Nevada, and South Carolina who are offering Free trusts.  While I have not had a chance to review all of them, there have been several trusts that were not set up correctly and pose substantial risks to the clients, their spouses and families for Constructive possession of NFA firearms.

The question still remains as to what will happen to their clients and others who have downloaded the invalid trusts and submitted them to the ATF. Apparently the ATF has approved them. It should be noted that just because ATF approved a Form 4 or Form 1 Transfer, this does not mean you are legally able to possess the firearms. They are only approving the ability to transfer the NFA firearms to a legal entity described on the Form 4 or Form 1.

To read more on this topic see the original article Free NFA Trust Form for Class 3, Title II purchases.  This article was written by David M. Goldman a Jacksonville Estate Planning and Probate Lawyer at the Apple Law Firm  PLLC.

When filling out a Form 1 for the first time with your NFA trust it can be confusing. With an ATF Form 4, there is typically a dealer involved or someone who has done it before so there are not as many questions. I have created a page on How to fill out a Form 1 with a link to a 5320.1 Form 1 that you can download and a sample that is filled out that can be used as a guide. The page also includes instructions on what information should be contained in your Form 1.

Prior to November, the time to approve a Form 4 was less than 8 weeks.  After November 20th, the number of people purchasing NFA items significantly increased and as a result the time to receive an approval on their ATF Form 4 or Form 1 increased to more than 6 months at their peak (26+ weeks).

Good news as I have recently heard from several of our clients that the Approval process is beginning to shorten.  Last week I heard from a client who stated that his NFA Firearms Trust approval time was between 4 and 5 months. 

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.

Joshua Prince a 3rd year law student has written an article on the BATFE approving an invalid trust.  Apparently an  individual on Silencertalk.com received back two approved Form 1's and on the back of one of his forms it stated "Consult counsel w/ the filing of your trust, proves to be invalid"

There have been several articles on why Quicken should not be used for creating a trust including an article by Mr. Prince which applies PA law to some factors I found as well as Using Quicken to prepare a trust: The good, the bad, and ugly! 

Josh contemplates that while the trust is invalid no transfer can take place and the the assets in the trust could be subject to a forfeiture action and anyone in possession could be subject to criminal charges for invalidly being in possession of a Title II firearm without properly transferring the firearm.

This is not the first invalid Quicken and Legal Zoom trust that I have heard of.  I have reviewed and modified many trusts that individuals have attempted to create on their own using canned software or generic forms.  Many of these trusts do not achieve the desired results and almost half of the trusts I have reviewed are invalid because of technical flaws contained within the trust.

Under these circumstances Mr. Prince and I  both would recommend that no transfer Form 1 or Form 4 take place to an invalid trust.  Josh suggested and I would agree that the transfer should be voided, the trust amended to a valid state, and then the trust should reapply for the transfer properly.

If you have a trust that is being used for NFA purposes and you would like it reviewed for validity contact a Gun Trust Lawyer.

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