PALADIN ARMORY

Manufacturer of Custom Firearms and Suppressors

P.O. Box 225   Elliston,  MT  59728

Phone 406-492-4570

e-mail: paladin@paladinarmory.com

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The Devil's in the Details...Know the Laws!

NFA 34 GCA 68 FOPA 86 VCCLEA 94 LOCAL LAWS
FINDING NFAs PRIVATE INDIVIDUAL TRANSFERS GOVERNMENT  TRANSFERS SOT FFL TRANSFERS OTHER FFL TRANSFERS
TAX PAYMENT CORPORATE OWNERSHIP TRAVEL AND USE TEMPORARY TRANSFERS TRANSFERABLE FIREARMS
CURIOS & RELICS PRE-MAY DEALER SAMPLES POST-MAY DEALER SAMPLES PRIVATELY BUILT NFAs TRUST OWNERSHIP

The National Firearms Act of 1934 (NFA 34): This was the second Federal firearms law, the first being the Mailing of Firearms Act of 1927 (18 U.S.C.A. 1715) which prohibited the shipping of concealable firearms (handguns) through the US. Postal Service.  The NFA 34 law (26 U.S.C.A. 1132 et seq.) was much further reaching and placed certain classes of firearms into a registered ownership category that required payment of a hefty $200 tax per firearm.  Contrary to popular belief, the tax is not an annual tax, nor is it a license.  The only time it is paid is when a functional NFA firearm is being transferred to or from a private owner (excepting inheritance), or when a private individual or nonlicensed entity is making a NFA or converting a firearm into a NFA.  The intent of the law was to greatly restrict or even eliminate the private ownership of firearms deemed popular with gangsters of the era*, including handguns (later removed to ensure passage of the bill), machine guns, silencers (a.k.a. suppressor), short-barreled rifles (SBR), short-barreled shotguns (SBS), Any Other Weapon (AOW) which included smooth-bore pistols and disguised firearms such as cane guns and pen guns.   Also restricted were destructive devices (DD) (grenades, exploding missiles, and their launchers (mortars, cannon, etc.)).  The DD definition also included any firearm or ammunition over .50 inch caliber, unless deemed to have a sporting purpose, such as shotguns and shotgun shells.  Black powder firearms that did not used fixed ammunition were excluded from the legislation.  Anyone willing to pay the initial registration or subsequent transfer tax of $200 per firearm, was allowed to make or acquire any NFA, provided there were no state or local prohibitions against them.  The law was subsequently amended by the passage of the Federal Firearms Act of 1938 (ch. 850, 2(f), 52 Stat. 1250, 1251), which required licensing of all gun dealers and manufacturers, and prohibited any unlicensed manufacturer or dealer from shipping firearms across state lines.  Also included in the legislation was a reduction of the tax on at least one AOW, the Marble Game Getter, which was now set at $1.  In 1960 the tax on all AOW transfers was reduced to $5, and the minimum length of any non-SBR rifle barrel was set at 16" instead of the original 18", thus allowing the popular M1 carbine to be legally owned without fear of confiscation if a particular barrel was slightly less than 18".  The required minimum overall length of all non-NFA shoulder arms remained at 26". 

* As a historical footnote, these laws originated to help deal with the excesses of prohibition era gangsters and bootleggers.  Both the 1934 and 1938 Acts were themselves patterned after an earlier law, the Harrison Anti-Narcotic Act of 1914, that authorized the taxation of cocaine and opiates.  When NFA 34 was originally proposed, Congress intended to target what it considered the weapons of choice of the most notorious public enemies - machine guns, hand grenades, silencers (suppressors), handguns, short-barreled rifles, and short-barreled shotguns.  As such, early drafts of the bill included a ban on these “gangster weapons” and any handgun with a barrel under 12".  After the U.S. Attorney General confided with the President and members of Congress that such a law likely would be overturned by the U.S. Supreme Court as a violation of the 2nd Amendment, the ban was changed to a $200 tax.  To prevent circumvention of the tax on handguns, restrictions also were placed on the shortening of any long gun into something that might be readily concealable on a person.  In reality, Congress knew that for the average wage earner of the day, a $200 tax would have been tantamount to a de facto ban on the legal possession of anything other than a non-automatic rifle or shotgun.  Therefore, in an effort to ensure its passage, handguns (excepting shortened rifles and shotguns) were removed from the list of registered firearms.  The minimum 26" overall length requirement for a shoulder arm or smoothbore handgun to not be classified as a SBR, SBS, or AOW was derived from Congressional testimony, during which it was stated that anything under 26" would be deemed readily concealable.  Such is the way the bureaucracy works!       

The Gun Control Act of 1968 (GCA 68): This act came about, in part, because of a Supreme Court ruling in Haynes v. United States (1968), which effectively rendered much of the 1934 law unconstitutional.  The SCOTUS ruled that requiring a criminal to register a NFA placed him in jeopardy of self-incrimination and therefore was a 5th Amendment violation.  GCA 68 quickly replaced and updated NFA 34, and further expanded federal reach into firearms possession.  Largely modeled after the 1938 Gun Control Act of Nazi Germany, a section of GCA 68 (Public Law No. 90-615, 102, 82 Stat. 1214 (codified at 18 U.S.C.A. 921-928)) updated and incorporated the National Firearms Act of 1934 (NFA 34) and Federal Firearms Act of 1938 (FFA 38), by restricting the transfer of newly imported machine guns to the military, law enforcement, and certain Special Occupational Tax (SOT) payers.  In addition, a short moratorium was provided before the law went into effect, to allow unregistered machine guns and other NFA firearms already in private hands, to be added to the Federal Registry without penalty.  It also banned the interstate mail-order sale of firearms.  In essence, GCA 68 converted earlier commerce and tax laws into stronger criminal law.

The Firearm Owners Protection Act of 1986 (FOPA 86): A somewhat vague statement was added to this bill that has been interpreted by the Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE) to mean no machine guns registered after enactment (May 19, 1986) can be built for possession by private individuals, corporations, or trusts.  BATFE further concluded that Special Occupational Tax (SOT) payers who are licensed gun dealers cannot receive "post-May" guns without first presenting a letter from a qualifying government agency that has requested to see the firearm.  Special Occupational Tax (SOT) payers who are licensed gun manufacturers are not affected by this ruling.  Nor do these rulings apply to other types of National Firearms Act (NFA) firearms.  Transfers to government agencies having law enforcement or military functions are allowed.  SOT payers who are also licensed as manufacturers are allowed to produce machine guns from scratch, from kits, or by means of conversion.  They cannot transfer them to private individuals.  They can be transferred to other SOT payers or government agencies only as described above.  BATFE has determined that post-May 19th guns cannot be retained by a SOT payer who fails to renew his SOT annually.   While some Federal Courts have upheld BATFE's policies as constitutional, one Federal appellate court has ruled to the contrary, claiming the only authority Congress had established to regulate machine guns was through registration and taxation, which was now made null and void for any machine guns constructed after 19 May 86.  This issue has not yet been settled by the US Supreme Court, and the Department of Justice continues to vigorously prosecute any perceived violation of existing BATFE rules.  

The Violent Crime Control and Law Enforcement Act of 1994 (VCCLEA 94): This law sunset on 30 Sep 04 and no longer applies. This law banned the public sale of new detachable magazines with more than a ten round capacity, and invented a new term - assault weapon, the future manufacture of which were also banned from public sale.  Note, the law applies only to firearms manufactured after enactment of the law.  Specifically, it limits certain features on certain types of firearms.  Semiautomatic rifles with detachable magazines may possess no more than one of the following features: pistol grip protruding conspicuously beneath the action, telescoping or folding stock, threaded barrel designed to accommodate a flash suppressor, flash suppressor (not to be confused with a muzzle brake), grenade launcher, bayonet mount.  Semiautomatic pistols with detachable magazines may possess no more than one of the following features: magazine that attaches outside the pistol grip, threaded barrel, shrouded barrel, unloaded weight of 50 ounces or more, a semiautomatic version of an automatic firearm.  Semiautomatic shotguns may possess no more than one of the following features: folding or telescoping stock, pistol grip that protrudes conspicuously below the action, fixed magazine capacity over five rounds, ability to accept detachable magazines.

State Laws and Local Ordinances: Every state except Hawaii allows some type of ownership of National Firearms Act (NFA) firearms, but about half the states (and perhaps some local municipalities) have statutes or ordinances that restrict or further regulate NFA ownership.  These can range anywhere from a state permit requirement to a ban on certain types of NFAs.  For example, among its many other restrictions, California bans suppressors, but allows machine guns and large bore destructive devices if one can acquire their rarely issued and discretionary state permit.  Connecticut allows machine gun ownership but only if the gun is not select-fire, i.e., able to shoot semi-automatic as well.  If you are uncertain of the applicable laws in your area, contact your state or national gun rights organization for help.  They likely will know more about your local firearms laws than anybody else.  If you believe your laws are too vague, bizarre, or restrictive, you can work through national, state, or local grass roots organizations to improve them.  This approach has proven highly successful in several states in recent years.  For example, thanks to the efforts of pro-gun civil rights groups, Montana and Washington no longer restrict ownership or use of suppressors; South Carolina now allows private ownership of all NFAs; North Carolina no longer requires a sheriff's permission and FFL to possess a NFA; and in Texas it is now legal to hunt with a suppressor.       

Where to find NFA Firearms: A private citizen can acquire National Firearms Act (NFA) firearms from other private individuals or dealers in his own state so long as there are no state laws restricting ownership.  Most states (over 40 at our last count) allow private ownership of at least some NFAs, but if you have any questions, e-mail us and we'll let you know.  Regular gun dealers, SOT payers, military organizations, and law enforcement agencies can acquire NFA firearms from sources in any state, i.e., manufacturers, dealers, private collectors, or government agencies.  Confiscated firearms may be retained or acquired by state or local government agencies, with the approval of the Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE).

Private Individual Transfers: A private citizen can directly acquire functional National Firearms Act (NFA) firearms from other lawful entities (individual, business, corporation, trust, government agency) within their own state, provided prior approval is received from the Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE).  Approval for an individual transfer requires payment of the applicable transfer tax ($5 for AOWs, $200 for all other NFAs), submission of two FBI fingerprint cards and two ATF Form 4s.  The ATF forms can be downloaded from the ATF website, or hard copies can be ordered online or from their call center.  Fingerprint cards can be ordered from their call center or online.  

The ATF 5320.4, Application for Tax Paid Transfer and Registration of Firearm (a.k.a. Form 4) is prepared in duplicate, with both copies signed by the individual, and must include a passport sized photo of the individual on each copy (do not staple them).  In addition, a photocopy of the signed Form 4 must be provided to the chief law enforcement officer (CLEO) whose name and address the individual has included on the form.  The CLEO no longer signs this form, however, if he has information he believes would disqualify the individual from owning a NFA, he may submit it to ATF.  Slanderous statements, malicious gossip, unsubstantiated comments, or personal opinion do not constitute acceptable information, and possibly could subject the CLEO to legal action by the individual. 

The FD-258, FBI fingerprint card, is prepared in duplicate by someone equipped and competent to do so.  Normally this would be a nearby law enforcement agency, though any business with the right equipment will suffice.  Both the individual being fingerprinted and the person taking the fingerprints will sign each card.   Make sure they are not smudged.  Fingerprint cards can be ordered from ATF (specify if this is for a NFA transfer; the codes they enter on the forms are different). 

If a firearm is being received by the lawful heir of an estate, or if the firearm is nonfunctional and registered as a DEWAT (deactivated war trophy), the tax is not due, but a tax-exempt TF 5320.5, Application for Tax Exempt Transfer and Registration of Firearm (a.k.a. Form 5) must be filed and approved before taking receipt of the NFA firearm.  In all other ways, the Form 5 filing process is the same as that of the Form 4.  Inherited firearms can be shipped to a lawful heir residing in another state if the receiving state allows private ownership of the particular type of NFA.  The heir cannot take receipt of the firearm until the Form 5 is approved by BATFE. 

Government Agency Transfers: There are no federal prohibitions on any type of government entity acquiring most National Firearms Act (NFA) firearms, including many destructive devices.  Some states prohibit law enforcement agencies from possessing certain types of NFA firearms or destructive devices.  All government agencies are exempt from paying Federal Transfer Taxes or Federal Excise Taxes.  In most cases, machine guns and other NFA weapons can be imported, purchased off-the-shelf, or custom manufactured specifically for any authorized government agency by using the tax exempt Form 5 (in this case, no photographs or fingerprint cards are required).  Seized or confiscated firearms can be retained by state and local law enforcement agencies, but they must be registered with BATFE on a Form 10.  Federal agencies are exempt from the registration requirement.  Excluding direct military contracts with licensed manufacturers, all other transfers to government agencies, including law enforcement agencies, must first be approved by BATFE.   All foreign transfers require State Department approval.

SOT Dealer Transfers: The Special Occupational Tax (SOT) is an annual fee paid to the U.S. Treasury Department by dealers, manufacturers, or importers of certain products including alcohol, tobacco, and firearms.  In the case of firearms, the SOT is broken down between National Firearms Act (NFA) dealers, manufacturers, and importers (a separate SOT applies to destructive devices).  For our purposes the term "SOT payer" refers to any currently licensed gun dealer, manufacturer, or importer who also has paid the SOT for dealing in NFA firearms.  SOT payers have the advantage of being able to transfer tax exempt, functional NFA firearms to other SOT payers and government agencies, with the prior approval of the Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE).   SOT payers also can acquire registered NFA firearms from any regular gun dealer or private citizen, but only after paying the applicable transfer tax and receiving BATFE approval.  SOT payers can transfer certain functional NFA firearms to in-state residents and to both in-state and out-of-state regular gun dealers, but only after they have paid the appropriate transfer tax and received approval from BATFE.

Regular Gun Dealer Transfers: Regular gun dealers or manufacturers who do not pay the Special Occupational Tax (SOT) to deal in National Firearms Act (NFA) firearms, still can acquire functional NFA firearms from in-state or out-of-state sources.  If the firearm is a machine gun, they are restricted to purchasing only those machine guns registered prior to May 19, 1986, excluding all dealer samples.  The applicable NFA transfer taxes must first be paid on each NFA firearm ordered.  Once this paperwork is approved and they have received shipment, transfers can then be conducted with private individuals in-state, or with other dealers either in-state or out-of-state.  These transfers also require payment of the tax and BATFE approval before they can be completed.

How to Pay the Transfer or Making Tax as an Individual: If you are making a firearm or converting a personal firearm into a National Firearms Act (NFA) firearm, you will need to provide the following forms to ATF.

Making a NFA: Prepare and sign two copies of the ATF 5320.1, Application to Make and Register a Firearm (a.k.a. Form 1).  The Form 1 can be downloaded from the ATF website, or hard copies can be ordered online or from their call center.  A passport sized photo of the individual will be attached to each copy (do not staple them).  A photocopy of the signed Form 1 must be provided to the chief law enforcement officer (CLEO) whose name and address are entered on the form.  The CLEO no longer signs this form, however, if he has information he believes would disqualify the individual from owning a NFA, he may submit it to ATF.  Slanderous statements, malicious gossip, unsubstantiated comments, or personal opinion do not constitute acceptable information, and possibly could subject the CLEO to legal action by the individual. 

Two FD-258, FBI fingerprint cards, are prepared by someone equipped and competent to do so.  Normally this would be a nearby law enforcement agency, though any business with the right equipment will suffice.  Both the individual being fingerprinted and the person taking the fingerprints will sign each card.   Make sure they are not smudged.  If fingerprint cards must be ordered from ATF, specify that they are for making a NFA (the codes are different).  Fingerprint cards can be ordered from their call center or online.  

You will pay ATF $200 for the "making" tax.  If done by credit card, there is a place on the Form 1 to enter this information.  Alternately, you can pay by check or money order. 

Transferring a NFA: If you are acquiring a NFA from someone else, you will need to file an ATF 5320.4, Application for Tax Paid Transfer and Registration of Firearm (a.k.a. Form 4).  The form can be downloaded from the ATF website, or ordered from their website or call center.  It is prepared in duplicate, with both copies signed by the individual.  A passport sized photo of the individual is attached to each copy (do not staple them).  A photocopy of the signed Form 4 must be provided to the chief law enforcement officer (CLEO) whose name and address are entered on the form.  The CLEO no longer signs this form, however, if he has information he believes would disqualify the individual from owning a NFA, he may submit it to ATF.  Slanderous statements, malicious gossip, unsubstantiated comments, or personal opinion do not constitute acceptable information, and possibly could subject the CLEO to legal action by the individual. 

The FD-258, FBI fingerprint card, is prepared in duplicate by someone equipped and competent to do so.  Normally this would be a nearby law enforcement agency, though any business with the right equipment will suffice.  Both the individual being fingerprinted and the person taking the fingerprints will sign each card.   Make sure they are not smudged.  If you are working with a NFA dealer, he should provide you with the correct fingerprint cards.  If not, you will have to order them from the ATF call center or online.  Specify that they are for a NFA transfer (the codes they enter on the forms are different).   

Technically, the seller is responsible for paying the transfer tax ($5 for Any Other Weapon (AOW), or $200 for a machine gun, suppressor, short barrel rifle, or short barrel shotgun).  However, ATF doesn't care who pays it, just as long as it is paid.  If done by credit card, there is a place on the Form 4 to enter this information.  Alternately, payment can be made by check or money order. 

If you are receiving the NFA from a Special Occupational Tax (SOT) dealer or manufacturer, he should provide you with copies of the required paperwork for each firearm being transferred to you, and assist you with the preparation.  He will review your paperwork, sign the Form 4, and submit everything to ATF for processing and approval.    

SPECIAL NOTE: Some states have their own requirements in addition to the federal paperwork.  Check with the appropriate licensing bureau in your state. 

Corporate or Trust Ownership Option: In some areas it was difficult to get a law enforcement signature on the tax paid Form 1 (make a National Firearms Act (NFA) firearm) or Form 4 (transfer a NFA firearm).  To circumvent this problem, many people acquired NFAs through a corporation or a trust.  As of 13 July 16, the requirement for a law enforcement endorsement was deleted by ATF and replaced by the following requirements.

Corporate ownership: The primary officer will complete the Form 1, Form 4, or Form 5, in duplicate and sign it.  Each applicable officer of the corporation will complete and sign a Form 5320.23, Responsible Person, and attach passport sized photo (do not staple them).  Each applicable officer of the corporation will complete and sign two FBI fingerprint cards.  This paperwork, along with any applicable tax payment and a COPY of corporation's articles of incorporation, will be submitted to ATF for approval.  A copy of the Form 1, 4, or 5, and a copy of each 5320.23 will be provided to the local chief law enforcement officer (CLEO), though no signature or action on the part of the CLEO is required anymore.    

In lieu of repeatedly submitting photos and fingerprint cards of each trustee for subsequent Form 1, 4 or 5 filings, ATF will waive this requirement and allow a single signed form to be submitted, provided it is accompanied by the form number, NFA serial number, and approval date of a previously approved form, along with a statement that there have been no changes in corporate officers or trustees.  This exception only applies for subsequent filings that occur within a 24-month period of any prior approval.  In theory, after initial approval of a Form 1 or Form 4, the corporation can file a Form 1, 4, or 5 every 24 months or less, and, provided there are no changes to officers or trustees, will not be required to resubmit any fingerprint cards, photos, or additional copies of the form for each trustee/officer.  Any new officer or trustee added during the intervening period must submit a 5320.23, Responsible Person, to ATF, with a copy of the 5320.23 and Form 1, 4, or 5 going to the local CLEO. 

NFAs belonging to a corporation must be retained by the corporation until that entity is dissolved.  At such time the NFAs must be sold or re-titled to another entity or person using a tax-exempt Form 5 (if allowed) or a tax-paid Form 4.  Otherwise, they must be surrendered to the Bureau of Alcohol, Tobacco and Firearms (BATFE). 

Trust ownership: In the case of trusts, the person creating the trust (a.k.a. grantor, trustor, settlor) shall sign the Form 1, 4, or 5 and print "as transferee" next to his name.  The transferee and each listed trustees will provide the following additional documentation to ATF when submitting the Form 1, 4, or 5 for approval: two completed and signed FBI fingerprint cards; one completed and signed Form 5320.23, with a passport size photograph attached (not stapled), a COPY of the trust, and any applicable tax payment.  A copy of the Form 1, 4, or 5, and a copy of each 5320.23 will be provided to the local chief law enforcement officer (CLEO), though no signature or action on the part of the CLEO is required anymore.   

NFAs belonging to a trust can be retained by any trustee until that entity is dissolved.  At such time the NFAs must be re-titled to another entity or person using a tax-exempt Form 5 (if allowed) or a tax-paid Form 4.  Otherwise, they must be surrendered to the Bureau of Alcohol, Tobacco and Firearms (BATFE). 

Even though ATF now requires trustee photos and fingerprints, trust owned firearms still have the advantage that trusteeship can be transferred, and/or inheritance can be specified by beneficiary name or status (spouse, son, daughter, etc.) to lawful individuals.  A lawful individual is anyone who legally can possess the NFA, therefore anyone with an existing felony conviction or someone who has been adjudicated mentally defective cannot act as trustee, lawful heir, or otherwise take possession of the NFA.  Minors can act as trustees or take possession through inheritance once they reach legal age.  Another advantage of the trust is that it need only be created once.  Once it is notarized, plain copies of it can be submitted to BATFE with each NFA application you file.  NEVER SEND ATF THE ORIGINAL SIGNED, WITNESSED, AND NOTARIZED TRUST.  ONLY SEND THEM COPIES.   They do not send the trust back with the approved Form 1 or Form 4; they keep it for their records.       

Preparing a trust: Establishing the trust can be quite simple or somewhat complicated, depending upon which approach you use, and whether or not your State imposes any restrictions or special conditions.  Generally speaking, a trust legally established in one State is recognized in all 50 States.  The simplest way to create a trust is through a GOOGLE search online for a generic trust sample or a fill-in-the-blank trust program.  Some of these samples and programs are free, and others may range in cost from $10 - $50.  You may be able to find a trust kit of fill-in-the-blank trust form at a local office supply store.  However, the safest (and most expensive) way to create a trust is to contact a local Notary Public, CPA, or lawyer.  Your trust need not be specific to firearms, and can be written generically to cover other assets such as real estate, bank accounts, and investments.  If you plan to include such items in your trust, then hiring a competent estate lawyer would be your best bet, but understand you may be charged several hundred dollars for his service.   Whichever course you choose, complete the Revocable Living Trust by entering your name in the appropriate locations, and the name of each designated successor trustee (and heirs, if desired).  This documentation must identify a point of contact for the trust and must be sufficient for BATFE to establish the legitimacy of the trust.  Two witnesses must be present to sign and have the Notary Public apply their seal and complete the form.  If using the Notary Public for the entire job, your cost and the time required are minimal.  All you will need is satisfactory identification (ask the Notary Public what is preferred).   Many trusts contain a Schedule A and Schedule B where various types of property covered by the trust are listed.  Do not enter a NFA into the Schedule A until after ATF approves the Form 1 (manufacture) or Form 4 (transfer).  If your Schedule A initially has no property listed in it, you can insert a dollar bill before scanning a copy for ATF.  Only after BATFE approves the transfer/manufacture, should you enter the NFA on the Schedule A (This same rule applies to all subsequent NFAs you want added to the trust).  NEVER SEND ATF THE ORIGINAL SIGNED, WITNESSED, AND NOTARIZED TRUST.  ONLY SEND THEM COPIES.  They do not send the trust back with the approved Form 1 or Form 4; they keep it for their records.       

Whether using a fill-in-the-blank trust kit or a professionally prepared trust, as a minimum, the following clarifying statements should be included in one form or another:

Identify yourself as the person creating the trust, i.e., grantor/trustor/settlor. Note that the person creating the trust will not have control over any of the property in the trust unless also listed as a trustee.

Identify yourself as the trustee (if more than one trustee is named, then list yourself first).   If the other trustees are only operating during your absence or incapacitation, then list them, in turn, as successor trustees. 

Provide a generic statement that anyone acting as trustee must be legally eligible to assume this duty.

Identify either by name or description (i.e., eldest surviving son, eldest surviving daughter, in turn) the decedent to whom the property in the trust will be transferred.  If there are multiple beneficiaries, or other properties besides firearms are to be included in the trust, you may want to clarify this statement so that not all property goes to one person.    Include a generic statement that any beneficiary must be legally eligible to receive any property from the trust, and must comply with any requirements of State or Federal law.

Include an explanation that if any property of the trust is to be liquidated, it must be done so in compliance with any applicable State or Federal law. Also state how the proceeds from liquidation will be distributed to beneficiaries.

The section on trust revocation should contain a qualifier that says before the trust is revoked, any property of the trust which requires a legal transfer of title, must be completed prior to the dissolution of the trust, in accordance with any applicable State and Federal law.

NEVER SEND ATF THE ORIGINAL SIGNED, WITNESSED, AND NOTARIZED TRUST.  ONLY SEND THEM COPIES.   They do not send the trust back with the approved Form 1 or Form 4; they keep it for their records.       

Rumors and Internet lore about NFA trusts: In recent years numerous rumors have spread across the internet warning potential trustees they could be jailed, fined, or have firearms in their trust seized by BATFE, if that agency determines after the fact that the trust was invalid.  The stories relate how trustees have suffered heavy penalties or even gone to prison for what amounted to minor infractions involving the wording or structure of the trust.  Such stories do not ring true for a number of reasons.  First there is something called “mistake of fact” which is not to be confused with “mistake of law”.  “Mistake of fact” is a defense to a criminal charge, while “mistake of law” is not.   Let us suppose a convicted felon attempts to circumvent Federal by using a what appears to be a valid trust to obtain possession of a NFA. This would be a “mistake of law”.  It is simply the old “ignorance of the law” or the "I did not know it was illegal" argument. This is not a valid defense.  However, a “mistake of fact” is a valid defense.  In this latter case, a trustee who is not prohibited by law from possessing a firearm, can rightfully argue that he believed he possessed a valid trust, whether he prepared it himself or used someone he believed to be competent estate attorney.  The error in this case is that you mistakenly believed the trust was prepared correctly.  An agency or prosecutor can of course always push the issue, but they are on far shakier prosecutorial ground where there has been a good faith effort to comply with the law.   A search was conducted of the Westlaw database “All Federal Cases”.  These database include all federal district court and appellate court cases.  The following search criteria were used: first search "National Firearms Act" and "NFA Trust"; second search "National Firearms Act" and "National Firearms Act Trust"; third search "National Firearms Act" and "gun trust"; fourth search "National Firearms Act" and "firearms trust".  No results were found for any of these searches.  Finally, a search for "National Firearms Act" and "Trustee" was tried.  While 18 results were found, none appeared to involved an NFA trust trustee.  Most of them regarded bankruptcies or other cases somehow involving trustee and some reference to the National Firearms Act.  BOTTOM LINE: To date (18 March 2011), we have been unable to confirm any case exists where a "mistake of fact" was provided as the ground for prosecution.  If anyone has evidence to the contrary, please provide us with the specific case numbers of these prosecutions so we can research them more thoroughly, and report our findings.

Travel and Use:  Do not take National Firearms Act (NFA) firearms out of state without first checking with the Bureau of Alcohol, Tobacco and Firearms (BATFE).  For machine guns, short barrel rifles, and short barrel shotguns, you will need prior approval from BATFE on a Form 5320.20 to travel interstate or to permanently move NFA firearms to another state.  This protects you from accidentally going someplace where they are banned.  If the state you are traveling to allows possession of the type of NFA firearm you own, and you have received prior approval on a Form 5320.20 (if applicable), then you can transport the firearm through any state just like any other firearm.  That means it must be unloaded and readily inaccessible (in a locked case or trunk of the car).  While in a travel status you are afforded the same protection as any other gun owner under the Firearm Owners Protection Act (FOPA 86) law.  You cannot be legally arrested for simply passing through a state, county, or township where the guns are banned unless you violate the procedures just described or stop in that state for an extended period of rest.  Necessary stops for food, gas, repairs, etc., are allowed.  Stopping to site-see, visit friends, or even spend the night, might be construed as an unnecessary delay and place you at risk.  Check your state and local laws for other restrictions that may apply regarding hunting, concealed carry, or self-defense with an NFA firearm.

Temporary Transfers:  National Firearms Act (NFA) firearms may be left for repair with an authorized person (dealer, gunsmith, manufacturer) without filing any federal paperwork (check your state and local laws for any restrictions).  The Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE) advises owners to first file a Form 5 before doing this.  The Form 5 was designed for the purposes of inheritance, government acquisition, or to transfer a deactivated firearm.   It looks very similar to the Form 4, the main difference being that no tax is paid.   However, law enforcement endorsements, photographs, and fingerprint cards are required (unless waived by BATFE).  As a result, the Form 5 is a bit awkward for purposes of repair.   If you are taking the firearm to someone local and reputable, and the repairs won't take a very long time, then a Form 5 may seem pointless.  If you are shipping the firearm to someone you don't know, it might be best to use the Form 5 as an audit trail.  Indeed, some companies won't accept NFA firearms without an approved Form 5.  Use your best judgment.

Transferable Firearms:  National Firearms Act (NFA) firearms that can be transferred to private citizens on a tax paid Form 4 are the most desirable and therefore the most expensive ones to acquire.  They are often referred to as "fully transferable".  Nearly all NFA suppressors, short barrel rifles, short barrel shotguns, and AOWs are transferable.  The number of registered machine guns that are transferable was frozen in 1986.  Included in this category are the following machine guns:

Original or converted machine guns, whether foreign or domestic, if added to the Federal Registry prior to enactment of the Gun Control Act of 1968 (GCA 68).

Deactivated war trophies (DEWAT) that were registered prior to enactment of the GCA 68.  DEWATs can be reactivated after payment of the $200 Federal Transfer Tax and approval by the Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE).

Domestically manufactured or remanufactured guns that were registered after the GCA 68 enactment, but prior to the enforcement date of the Firearm Owners Protection Act of 1986 (FOPA 86) on May 19th, 1986.  This includes registered receivers, sears, bolts, or other parts accepted by BATFE.

Imported guns that were remanufactured into machine guns prior to the FOPA (May 19, 1986).  This includes registered receivers, sears, bolts, or other parts accepted by BATFE.

Curios and Relics: Some states allow private ownership of machine guns only if they are listed as Curios & Relics by the Federal Government.   Examples would include original Thompson 1921 or 1928 submachine guns, and early production M-16 rifles.  The Curios & Relics list is periodically updated and you can petition for particular guns to be added.  Normally a gun is accepted to the list if the Federal Government determines it is of some historic value or of such an age or rarity that it is unlikely to see criminal use.  Collectors who possess a Curios & Relics Federal Firearms License (C&R FFL) can purchase these guns out-of-state, with prior payment of the applicable transfer tax and approval by the Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE).    

Pre-May Dealer Sample: Some machine guns manufactured or imported before 1968 were classified as dealer samples.   All machine guns imported after 1968, but prior to May 19, 1986, are also classified as dealer samples.  Collectively, they are referred to as "pre-May" dealer samples, and are transferable to Federal Firearms License (FFL) dealers (01) and manufacturers (07) and importers who have paid the Special Occupational Tax (SOT) for the current year.  A dealer who acquires a "pre-May" dealer sample and then fails to pay the SOT in any succeeding year may retain the gun in his private collection.  It only can be transferred to someone holding a SOT or to an approved government agency, usually military or law enforcement.  An exception is made sometimes if the gun is being inherited from the dealer's estate by a family member.     

Post-May Dealer Sample: Any machine gun manufactured or imported after May 19, 1986, is considered a "post-May" dealer sample, and only can be transferred to firearms dealers who also are Special Occupational Tax (SOT) payers or to government law enforcement agencies or military units.  In order to receive the gun, the dealer must provide a letter on organizational letterhead showing that a legitimate government entity has requested to see a particular firearm or firearms.  Firearms manufacturers who also are SOT payers are exempt from this requirement.  Post-86 machine guns can be retained by dealers/manufacturers only so long as they pay their annual SOT.  If it is to be dropped, the Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE) expects all post-May machine guns to first be disposed of, surrendered, or destroyed.  They can be transferred only to another SOT payer or approved government agency, as previously described.

Privately Building NFA Firearms: Provided there is no state or local restriction, you can build your own National Firearm Act (NFA) firearm (except for machine guns) if you receive prior approval from the Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE) on a tax paid Form 1.  Along with the Form 1, you must include fingerprint cards, photo of yourself, and a drawing of the firearm.  A copy of the draft Form 1 must be provided to you chief law enforcement officer, but no action on his part is required or allowed.   In the case of corporate or trust filings, included with the Form 1 are photos, fingerprint cards, and a completed ATF Form 5320.23 for each responsible person (RP).   The RPs include trustees and trust grantors, or officers of a corporation who have access to the NFA.  The RPs also must provide a copy of their 5320.23 to their local chief law enforcement officer.  In all cases, the tax paid will be $200 per firearm.  Once approved, they will be treated as any other fully transferable NFA firearm.  ATF requires your name, corporate name, or trust name (as applicable) be engraved/stamped on the NFA just as it appears in the trust document, along with your city and state (two letter state abbreviation is allowed), and a unique serial number (if a pre-existing serial number is not already present).  Please note that the marking requirements may appear to contradict the instructions that accompany the Form 1, which says such new markings apply to firearms assembled from parts.  However, BATFE has confirmed to us that this naming convention applies to all Form 1 firearms, even if it is a pre-existing firearm with an existing name, place of manufacture, and serial number.  You have the option of sending a written request for variance (in duplicate) to the Director of BATFE if you believe existing markings meet the identification criteria.  Otherwise, you must engrave or stamp the required identification to a depth of .003" using at least 1/16" inch characters.  Consult the BATFE website for further details.

 

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