We understand that ATF has approved a number of applications to permit Gun Trusts to manufacture machine guns and then rescinded the tax stamp to make the machine gun.

Many others have reported to us today that their Form 1 was disapproved by the ATF with the following reason:

Reasons For Disapproval

THE GUN CONTROL ACT OF 1968 (GCA), AS AMENDED, PROHIBITS ANY PERSON FROM POSSESSING A MACHINEGUN NOT LAWFULLY POSSESSED AND REGISTERED PRIOR TO MAY 19, 1986. SEE 18 U.S.c. § 922(0). THE GCA DEFINES THE TERM “PERSON” TO “INCLUDE ANY INDIVIDUAL, CORPORATION, COMPANY, ASSOCIATION, FIRM, PARTNERSHIP, SOCIETY, OR JOINT STOCK COMPANY.” SEE 18 U.S.c. § 921(A)(1). PURSUANT TO THE NFA, 26 U.S.c. § 5822, AND IMPLEMENTING REGULATIONS, 27 C.F.R. § 4 79.105(A), ATF MAY NOT APPROVE ANY PRIVATE PERSON’S APPLICATION TO MAKE AND REGISTER A MACHINEGUN AFTER MAY 19, 1986.

THE FACT THAT AN UNINCORPORATED TRUST IS NOT INCLUDED IN THE DEFINITION OF “PERSON” UNDER THE GCA DOES NOT MEAN THAT AN INDIVIDUAL MAY AVOID LIABILITY UNDER SECTION 922(0) BY PLACING A MACHINEGUN “IN TRUST.” CONSEQUENTLY, IN TERMS OF AN UNINCORPORATED TRUST, ATF MUST DISREGARD SUCH A NON-ENTITY UNDER THE GCA AND CONSIDER THE INDIVIDUAL ACTING ON BEHALF OF THE TRUST TO BE THE PROPOSED MAKER/POSSESSOR OF THE MACHINE GUN.

It would seem that the ATF does not consider their approval to be governmental authority. The personal possession has an exception that deals with machine guns under the authority of the government.

If you received an approval and it was receinded and would like to explore your options please contact us.

ATF is pleased to announce the return of the following eForms to active service: ATF Form 5 on 8/27/2014, ATF Form 9 on 9/2/2014, and ATF Form 5300.11 (AFMER) on 9/5/2014.

Please note that at this time no date has been determined for the return of the ATF Forms 3 and Form 4 to service on the current platform. In the interim, ATF has devoted additional resources to paper forms processing within the NFA Branch to augment the volume of receipts and current pending applications.

Today I ran across an entry on Nolo’s website addressing the appropriateness of using their living trust software, commonly referred to as Quicken, or Will Maker, to make a Gun Trust. The same issues would exist for Legal Zoom or other standard trust software. Thousands of people and many gun dealers have prepared gun trusts using Nolo’s software. The problem is the software was never designed for Gun Trusts and their trust may cause legal problems for their family and friends.

Nolo states:

Can I use a Nolo living trust to make a gun trust?

No. If you want to create a gun trust, get personalized legal advice from an expert on gun laws. Nolo living trusts are designed for the people who simply want to pass on their assets while avoiding probate. Gun trusts are complicated because they:

– may need to last for more than one generation — may have multiple trustees, and — must address both state and federal weapons laws.

Nolo’s living trusts do not address these issues, and so you should not use Nolo living trusts to transfer weapons. If you want to make a gun trust, get help from a lawyer who has plenty of experience with these trusts and state and federal weapons laws.

While Nolo’s webpage does not address many of the issues to use a real Gun Trust, they have finally addressed the issue clearly. NO you should not use Nolo’s software to create a Gun Trust. We have been telling people this for years and now Nolo has addressed the issue to help people avoid the problems that using their product could create. If you have, we can help you modify your trust into a proper Gun Trust with the help of a Gun Trust Lawyer® licensed in your state.

Updated 8/21

I recently published an article on Gun Trusts and an amazing 1 day approval. I felt that this was an unusual circumstance and decided to submit an electronic ATF Form 1 back on July 26th using my personal Gun Trust to test out the current time for approvals on using a Trust from a Gun Trust Lawyer®.

While I was not surprised to have not received an approval on July 27th, I have been checking the status regularly. I was surprised to receive an approval early Saturday morning August 2, 2014. This approval was not anywhere as quick as our clients 1 day approval, but only took 35 days to get approved which is amazing considering that many are reporting 9-14 months for a paper approvals. Not only was the approval quick, but the email notification came with an attachment which contained a copy of my Form 1. The process for printing the approval was more complex than it needed to be and I guess that the ATF decided they could cut down on the amount of communication and support by just sending a copy. A wise move by the ATF.

Please let us know about your approval times so we can see if others are experiencing similar results.

The 11th U.S. Circuit Court of Appeals in Atlanta has ruled a Florida law restricting what doctors can tell patients about gun ownership to be constitutional on Friday. The court ruled this law legitimately regulates professional conduct and does not regulate professional conduct and does not regulate the doctor’s first amendment free speech rights.

This ruling by the Atlanta court overturned a previous decision that declared the law unconstitutional. There is still an injunction blocking enforcement of the 2011 law, which has become popularly known as “Docs vs. Glocks.” It was challenged by organizations representing over 10,000 state health care providers, most notably the Florida chapters of the American Academy of Pediatrics and the American Academy of Family Physicians.
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One of the benefits in using a Gun Trust is that you are able to submit electronic applications with the new ATF website. This is possible because a Gun Trust does not require a CLEO signature nor fingerprints. Currently only Form1s can be submitted electronically, but Form 4s should be back online soon. It is important to fill out the application correctly as there is not a way to correct mistakes that are made like with the paper forms. A mistake in the past would have put your application in the back of the line, but not any more.

If you make a mistake on an ATF eform (http://www.atfonline.gov) there is a way to submit a correction without going to the end of the line.

Once you receive the notice that your eForm has been rejected, you will receive a refund of the application fee in around 10 days. You do not have to wait for the refund to be processed to resubmit a corrected application. You can pay the fee again while waiting for your refund or wait for the refund and them resubmit the application.

Once you submit your new application send an email to Ted.clutter@atf.gov and include the control number of the rejected application and the control number of the new corrected eForm and the application will be reprocessed. This should decrease the time for the approval process on the corrected eForm.

1daydates.jpgOne of our clients submitted an application to build a Form 1 on June 24, 2014 and was surprised when they checked their email the next morning and found that the ATF had approved the application to build the SBR.

When I first received the call, I thought it was a mistake, but then I walked the client through the Atfonline website and the process of printing the electronic Form 1. I have provided a copy for those who are as skeptical as I was about a 1 day approval process on a Form 1 from the ATF.

Not sure if this was a mistake or the ATF had just cleared out the backlog of Form 1’s but if you considering creating a Gun Trust to build an SBR, you may want to do it sooner than later.

Here is a copy of the full Form 1 for those who would like to review it.1dayForm1.pdf

To check out the current time for approvals, I submitted a electronic Form 1 on June 26 and it was approved on August 2, 2014. While 35 days is not bad, it is not overnight.

Today I received an announcement and verified that you can now process Form 1s online again. For those with a Gun Trust, you can now process these electronically again. Still no word on when Form 4s will be available to process online.

There are currently 15 legal examiners in the background investigation phase of hiring. ATF has been authorized to use overtime funding to process NFA applications and they reduced their outstanding applications by 23%. They are currently processing around 6000 applications a week and have a backlog of 62,000. This means that we might be looking at as little as 10 weeks to process applications and even quicker for electronic applications. This is a substantial decrease from the 9 -15 months we have been seeing in the past few months.

In the last 4 weeks they received 17,800 applications and processed more than 22,400 applications.

As of January 1, 2013 it became legal persons with a C&R license to purchase, transfer, make, possess, and use an SBR in IL.

The Law is poorly written and only indicates that it restricts possession. While it has been clear that a trust could not purchase an SBR in IL, there has been a question about whether an SBR purchased legally in another state by a trust could then be in the possession of a Trustee, authorized by the trust to possess the firearms in the state of IL when that person had their own C&R license.

ATF has recently rejected such a request stating that a trust may not have an SBR in IL. This does not appear to be entirely correct, but until someone is willing to challenge the decision by the ATF it will not be possible to use an ATF 5320.20 to bring an SBR to IL. Here is a copy of a rejected form.

This appears to be another example of the ATF not understanding trusts and how they work. The restriction in IL is on possession and not ownership, the trust owns the firearm, the trustee possesses the items in the Gun Trust.

Options in IL?

The Gun Control Act defines a “person” is as “Any individual, corporation, company, association, firm, partnership, society, or joint stock company.” While this definition does not include a person, it does include a partnership, corporation, company, or firm. We have had clients create business entities that were owned by a trust or where a trust was one of the members, directors, officers, or shareholders. By creating a business entity that is owned by a Gun Trust, you should be able to have the business entity obtain a C&R license, then have the business entity apply for approval to purchase or make an SBR using a Form 4 or Form 1.

I am sure many people will ask, why would I incorporate a Gun Trust when I could just use the business entity itself. The answer to this deals with the many benefits that a Gun Trust provides in the management and succession planning (the beneficiary designations) that are not available with a business entity. While it would be possible to create business documents that incorporated some of the protections found in a Gun Trust, the cost to do so would be far more expensive than just using a Gun Trust.

In Summary, SBRs are legal to possess in IL as of January 1, 2013 if the person in possession has a C&R. It appears based on documents rejected by the ATF that a Trust or Gun Trust may not bring an SBR to IL when it was purchased legally in another state even when the trustee has a valid C&R license.

Last week, the U.S. Supreme Court ruled in a case involving a Virginia man who could legally purchase a firearm and did so for an uncle from Pennsylvania. Even though the Pennsylvania man who ultimately bought the gun was not legally prohibited from owning a firearm and passed a background check, the Court, in a 5-4 decision, said the transfer violated federal “straw purchase” law.

The ruling has resulted in confusion among federal firearm licensees (FFLs), particularly relating to gift purchases of firearms.

The Bureau of Alcohol, Tobacco, Firearms and Explosives has been asked to provide clarification on the Supreme Court’s decision for its firearms retailer members.

Meanwhile, it is our understanding that the Supreme Court ruling does not make it illegal for a consumer to purchase firearms as gifts.

As noted in the instructions on the Form 4473 for Section 11.a.
Actual Transferee/Buyer: For purposes of this form, you are the actual transferee/buyer if you are purchasing the firearm for yourself or otherwise acquiring the firearm for yourself (e.g., redeeming the firearm from pawn/retrieving it from consignment, firearm raffle winner). You are also the actual transferee/buyer if you are legitimately purchasing the firearm as a gift for a third party.

In the case Abramski v. United States, the Court ruled that the Virginia man, a former police officer purchasing the firearm at a discounted price, was acting as agent for the true buyer, his uncle. By declaring he was the “actual buyer” on the Form 4473, the Virginia man violated straw purchase law, because in effect he was acting as an agent for his uncle who had provided the funds for the purchase.

The difference seems to come down to the fact that it was not a gift because his uncle paid the buyer for the item.

Remember, if you are using a gun trust to purchase NFA firearms, not to simply add someone to make a purchase you would not be able to make to avoid the potential problems associated with a Straw Purchase.

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