NFA Gun Trust Lawyer Blog

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.

One 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

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.

I received an email regarding a clarification of the previous version of this blog.
The email I received was to clarify what was happening and stated that there will be discussions with their Commissioners to let them know that they are taking a look at the issue of hunting GAME animals with a suppressor in Florida and plans to bring a draft rule change for the Commissions consideration at the September Commission meeting.

At that time, the proposal would be to allow the use of suppressors for hunting Game animals. The hunting of Game animals in is permitted in a majority of states and Florida, which usually leads the nation in gun legislation, is clearly in the minority.

No action or decision on the issue will take place next week and it would likily be many months before such a rule change could become effective.

Remember that no action or decision requested from Commissioners on this issue next week, it is only to let the Commission know that the FFW, Division of Hunting and Game Management is thinking of making such a proposal in September.

Currently it is not legal to hunt Game animals with suppressors in Florida, but some hunting with suppressors is permitted in Florida. If you would like to know what is permitted, please see this article on Hunting in Florida with a Suppressor.

On July 19 2014, Chief Counsel Joshua Prince and Attorney Eric Winter of Firearms Industry Consulting Group (FICG), a division of Prince Law Offices, P.C., in conjunction with The Sportsman's Shop, will offer a four (4) hour seminar on state and federal firearms law at the Welsh Mountain Community Center, 564 Sandmine Road, New Holland PA 17557.

The cost is $10 and you must register by July 12, 2014. You can download a copy of the registration form, here. All registrations are to be mailed or dropped off at The Sportsman's Shop, 101 West Main Street, New Holland PA 17557. If you have questions, please feel free to contact The Sportsman's Shop at 717-354-4311 .

We work with lawyers in Alaska who accept most legal benefit plans offered to many state employees in Alaska. Many of these plans pay for trust work which would include the creation of a NFA Trust, Gun Trust, or Multi Generational Gun Trust. Some of these legal plans have a maximum amount of coverage. Each legal plan is structured differently and the use of the legal plan can significantly reduce the cost of a Gun Trust in Alaska. If you live in Alaska, work for the government, and participate in a legal benefit plan, let us know and we can put you in touch with an Alaska Gun Trust Lawyer® who may be able to provide a free or discounted Alaska Gun Trust to you or your family.

To answer this question you must look a the Florida Statutes and Florida Administrative code. While Florida Law does not specifically grant the right to use a suppressor while hunting in certain conditions, you must remember that laws do not grant rights they restrict them so by interpreting what rights you do not have, you can determine what is left.

In Florida there are four classifications of land:

1. Wildlife Management Areas;
2. Wildlife and Environmental Areas;
3. Public land that are not classified as Wildlife Management Areas or Wildlife and Environmental Areas ; and
4. Private land.

You may not take GAME animals (mammals or birds) or Crows with a suppressor or machine gun on any type of land. Per FAC 68A-12.002

You may not take wild hogs on Wildlife Management Areas and Wildlife Environmental Areas (per FAC 68A-15.004 and 68A-17.004), but can use a suppressor to take other non game animals such as furbearers unless prohibited to be hunted the area brochure or the area brochure prohibits the use of suppressors.

Game animals include Resident Game Birds, Resident Game mammals, Migratory Game Birds and Protected Mammals.

See http://myfwc.com/hunting/regulations/taking-game/

Neither Florida Law nor Florida Administrative Code restricts the use of suppressors (silencers), on private land, to take varmint, furbearers, non native game animals. In addition, suppressors can be used to take wild hogs on public land that is not classified as a Wildlife Management Area or Wildlife and Environmental Area.

Here are some definitions that will help make sense of these two statements.

• Game birds --Wild turkey, quail, rails, snipe, woodcock, ducks, geese, brant, dove, coot, common moorhen, and non-native species generally considered game such as pheasant, chukar partridge, and coturnix quail.


• Resident game mammals --deer, gray squirrels and rabbits


• Furbearers --bobcats, otters, raccoons, opossums, coyotes, beavers, skunks and nutrias


• Migratory game birds --ducks, geese, common moorhens, coots, snipe, rails, woodcocks, mourning doves and white-winged doves


• Protected mammals --Florida black bears, fox squirrels and Florida panthers cannot be taken or pursued.

Suppressors can be used on private land in Florida to take some animals as indicated above. Suppressors (silencers) should not be used to take any Game animal (mammal or bird) crow, or wild pig in a Wildlife Management Area or Wildlife and Environmental Area and non game animals (wild pigs or furbearers), may be taken on other public land that is not classified as a Wildlife Management Area or Wildlife and Environmental Area.

Yesterday, the Governor of Louisiana signed House Bill 186 into law. This law will legalize the use of suppressors while hunting for all game and non-game animals in the state of Louisiana. The law is effective August 1, 2014. The current trend in the United States is to legalize the use of suppressors while hunting. Over 30 states now permit the use of a suppressors while hunting either game or non-game animals. This year, three states, including Georgia and Alabama have legalized hunting with suppressors and give hunters the ability to protect their hearing.

The ASA reports that a similar measure is in progress in Ohio. Louisiana statute even allows for the use of suppressors while hunting non-game animals.

Under the National Firearms Act, an individual, trust, or business entity may purchase a suppressor. A Gun Trust is designed to allow for multiple people to be in possession of the suppressor which is not allowed with an individual purchase. In addition, a purchase by a Gun Trust can speed up the process by removing the necessity to obtain a CLEO sign-off and when the ATF brings back electronic filing, a Trust application for a Form 4 purchase from an FFL can be filed electronically which can reduce the time for approval.

A Gun Trust can be designed and used to purchase and own all types of firearms, even those not restricted by the NFA. To find out more about how a Gun Trust can help you, contact a Gun Trust Lawyer®

Late in 2013, the ATF published a notice that they intended to seek to revise the regulations regarding the documentation that is required for a Gun Trust and for a business. After the ATF received more than 9500 comments on the proposed changes, the ATF had originally announced that a decision was set to be published in June of this year. As the June date has approached, we have reported that it was unlikely that the ATF would actually be able to review and respond to the comments by the June date and that the ATF was not likely to be able to respond until 2015.

In the latest publication of the Semi-Annual Regulatory Agenda, ATF updated the date of the projected date to show that ATF does not expect to publish a final rule until 2015.

DOJ/ATF RIN: 1140-AA43 Publication ID: Spring 2014

Title: Machine Guns, Destructive Devices and Certain Other Firearms; Background Checks for Responsible Persons of a Corporation, Trust, or Other Legal Entity With Respect to Making or Transferring a Firearm

Abstract: The Department of Justice is planning to finalize a proposed rule to amend the regulations of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) regarding the making or transferring of a firearm under the National Firearms Act. As proposed, the rule would; (1) add a definition for the term "responsible person"; (2) require each responsible person of a corporation, trust or legal entity to complete a specified form, and to submit photographs and fingerprints; and (3) modify the requirements regarding the certificate of the chief law enforcement officer (CLEO).

Final Action 01/00/2015

This is great news for those who are wanting to get a Gun Trust from a Gun Trust Lawyer® and have the opportunity to file electronically. As you may know, the ATF has removed the ability to file a Form 1 and Form 4 electronically, but expects to have it back up in the short term as they make changes to the system to handle the huge number of electronic submissions.

Recently, I had an electronic version of a Form 1 approved by the ATF for my Gun Trust and wanted to clarify what is required for engraving.

ATF 5300.4

In 27 CFR 479.102 (page 92) describes what is necessary to engrave on a SBR or SBS when one is manufacturing. This is not necessary if you purchase one that is already manufactured as it will have been done for you.

1) On the Frame or Receiver the Serial number;
2) on the frame, receiver, or barrel the following additional information;

A)The model;
B)The caliber or gage;
C)Your name or name of the Trust in the case of a Trust (no abbreviations are permitted for the Trust name);
D)The city and state (you can abbreviate the state with the official 2 digit state code)

The above mentioned information must be engraved, casted, stamped (impressing) or otherwise conspicuously placed or caused to be engraved, cast, stamped (impressed) or placed to a minimum depth of .003 inch and in a print size of the Serial number shall be no smaller than 1/16 inch.

As an interesting side note, my gun was manufactured in Jacksonville, FL so the city and state were already engraved. When I asked ATF, if I needed to engrave Jacksonville, FL, they said yes and pointed me to an ATF Ruling on adopting identification of FIrearms from 2013.

Based on the ATF letter requiring NICS checks for Trusts, the ATF may have accidentally opened the registry for new Machine Guns when registered in the name of a trust which is not a person under the GCA.

The Prince Law Blog quotes the same letter I wrote about a few days ago where the ATF determined that "Unlike individuals, corporations, partnerships, and associations; unincorporated trusts do not fall within the definition of "person" in the GCA." And therefore, as a result,

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.

So, ATF, trying to be cute and find a way to require NICS checks without Congressional action, declared trusts not to fit the definition of a "person" under the GCA. No big deal, especially for us in Pennsylvania, as Pennsylvania Instant Check System (PICS) checks are already required for all NFA firearms, except silencers. But, not so quick...let's look at Section 922(o) of the Gun Control Act...

Section 922(o) provides:

(1) Except as provided in paragraph (2), it shall be unlawful for any person to transfer or possess a machinegun.
(2) This subsection does not apply with respect to-
(A) a transfer to or by, or possession by or under the authority of, the United States or any department or agency thereof or a State, or a department, agency, or political subdivision thereof; or
(B) any lawful transfer or lawful possession of a machinegun that was lawfully possessed before the date this subsection takes effect.

So, we have a prohibition on any "person" transferring or possessing a machinegun which was not lawfully registered before May 19, 1986. BUT, an unincorporated trust is not a "person" under the GCA, so this provision cannot apply to it.

In turning to the National Firearms Act, as amended, 26 U.S.C. 5801, et seq., we find that a "person" is defined as including a trust, pursuant to 26 U.S.C. 7701. Yet, there exists no 922(o)esque provision in Section 5801, et seq.

Therefore, pursuant to 26 U.S.C. 5812 and 5822, an unincorporated trust may lawfully transfer and make machineguns, as it is not a "person" for purposes of the GCA and Section 922 only applies to "persons" as defined by the GCA.

Before anyone rushes to complete a Form 1 to make a new machine gun, they should understand that the ATF will likely reject this and if they want to push the issue they should be expect to litigate the issue. Even if litigating there is no guarantee of prevailing.

That being said, I believe I will submit a Form 1 for permission to manufacture a new machine gun along with a memo regarding the issues so that the opportunity to litigate the issue would be available after an expected rejection.

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

On Friday May 3rd, Alabama voted unanimously to repeal the prohibition of the possession and use of suppressors or silencers while hunting for all game and non-game animals. As of Friday May 3rd 2014, it became legal to possess and use a suppressor while hunting.

The majority of states now allow hunting with a suppressor. Alabama will be the 32nd and on July 1st Georgia will become the 33nd.

It shall be unlawful to possess fully automatic firearms or silenced firearms while hunting any species of wildlife.

Louisiana and Ohio have similar changes to the law int he works and it may become legal to use suppressors while hunting in those states later this year. Watch this blog for updates to other states regarding the use and possession of suppressors.

If you are thinking about purchasing a suppressor it is important to remember that only individuals, business entities, and trusts can purchase them. Of these there are many benefits to using a Gun Trust which include the ability to have multiple authorized users and the ability to help protect your family and friends from accidental transfers through actual or constructive possession as well as the ability to give someone the ability to determine when and if family members who survive you would be appropriate to receive the firearms restricted by the NFA.