Shocking Statements/Concessions by ATF at the NRA Firearms Law Seminar

Today, at the NRA Firearms Law Seminar in Nashville, Tennessee, NFA Branch Attorney William (Bill) Ryan spoke about Gun Trusts. Before we get into some of his somewhat shocking statements/concessions that are clearly contrary to ATF’s prior positions, it was interesting that he started out by saying that, in his opinion, the largest cause of the backlog at the NFA Branch is the submission of non-attorney drafted trusts and fill in trusts, which result in a high number of error letters due to their invalidity. He actually stated that he HIGHLY advised that attorneys handle the drafting of the trusts because of the plethora of issues the NFA Branch has to contend with in relation to the non-attorney drafted trusts. For some statistical background, he stated that in 2003, there were 45 trust applications. In 2012, there were 36,000 trust applications. He also reaffirmed that trusts can own any type of firearms, both Title 1 and Title 2 firearms.

Comments Regarding ATF 41P

ATF Attorney Ryan stated that ATF is “still sorting through the comments filed in opposition to ATF-41P” and that he still has a number of them to review. Since ATF is still sorting through the issues presented in the comments, they cannot have drafted a final rule taking into account those comments/issues and cannot have responded to the comments/issues. More importantly, once a draft final rule is prepared with responses to all the issues raises, it will have to go up to the Chief Counsel’s Office. While he said he had no idea when to expect ATF to take any action, it clearly seems based on his comments that the action date of May 2015 will be pushed back at least another six months.

More importantly, in response to a question of what happens when the executor of an estate is a prohibited person, Attorney Ryan responded “He can’t possess it.”¬† Which is obviously correct. However, the questioner then said but how do you know because no background check is performed and he could be in possession of that firearm as a prohibited person. Attorney Ryan responded, “It is on that person to know that as well.HOLD ON.

The entire putative premise for ATF-41P was that prohibited persons were gaining access to NFA firearms. Now, when presented with a question of a prohibited executor coming into possession of NFA firearms, the ATF is perfectly comfortable relying on the prohibited executor not to possess the firearms in the estate but is not perfectly fine with relying on a prohibited settlor or trustee not to possess the firearms in a trust? Say what?!?! ATF just undermined its entire premise for ATF-41P. I guess it is time to submit another supplemental comment in opposition to ATF-41P. (By the way, there is nothing prohibiting the submission of additional comments even after the comment period has closed and there is case law, depending on the status of the administrative agencies promulgation of a final rule, that requires the agency to consider them and respond to them. So, yeah, continue submitting comments!)

Comments Regarding Person Under the GCA vs. NFA

Further solidifying my argument that a trust can manufacture a machinegun, as it is not a person under the GCA but is a person under the NFA, he acknowledged, including in the presentation slides, that the definition of a person under the NFA includes a trust but under the GCA, a trust is not included. Specifically, he declared “This explains why a trust can have NFA firearms but a trust can’t be licensed under the GCA. It’s not a person and cannot be a licensee; only an individual [sic] can be a licensee.” (I believe he meant only a “person” can be a licensee, referring to the definition of a person under a GCA).

This extremely problematic for ATF given its prior position that putatively it can pierce through the trust to a person. If it can pierce through the trust to an individual (or other entity defined as a person under the GCA), then it cannot deny a trust an FFL. WHOOPSIE. It’s a shame that this issue hasn’t been raised in the litigation that has been filed utilizing my argument, as it has been a longstanding issue, which will result in a win for the Industry regardless of how the court decides the issue (assuming it is properly litigated).

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9 Comments

Filed under ATF, Firearms Law, Gun Trusts

9 responses to “Shocking Statements/Concessions by ATF at the NRA Firearms Law Seminar

  1. Pingback: ATF Statements at the NRA Firearms Law Seminar - NFA Gun Trust Lawyer Blog

  2. Steven

    Do you have any knowledge of whether the ATF can legally make existing trusts with already approved items be required to submit paperwork when adding new trustees? Say if I don’t buy another NFA item but I want to add someone to my trust after 41p.

    I know we don’t know the end result of 41p but do they have the authority to make me ask permission to add someone after I already have been approved for my existing items?

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  3. ATF is a TRUST

    The ATF knows about trusts, because it IS a trust. Look at ” Puerto Rico Trust Number 62 ” By definition : at ” 27 usca section 201 ” it may also be a person . Jurisdiction is LIMITED if it has any at all. See ” U.S. Court of Appeals ,7th circut, 7-30-1993, 1 f.3d 1511 ;1993 us ap .lexis 19747 ” Also in the case US v DJ Vollmer & Co. / NO ATF jurisdiction after first sale of an import firearm. Lets cut the haed off this snake for good.

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  4. Dco777

    All the things BATFE says at this seminar means nothing. In fact their old rulings and letters mean nothing. They just change their “interpretation” and viola`, you’re a felon!

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  5. lionsfan54

    Please explain to a dummy like me the difference between an executor, a settlor, and a trustee. I thought 41p was all about shutting down trusts for anyone who doesn’t get CLEO sign off, period.

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    • NaughtyDog

      An executor is the person who distributes a deceased person’s property pursuant to their will. A settlor is the person who puts the property into a trust. A trustee is the person who acts on behalf of a trust.

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  6. So if a Trust can ‘Make/Register’ a machine gun via Form 1, does that mean the Trust can buy a “Post Sample” or “Dealer Sample” or from a SOT?

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    • Dcow777

      No, if the current law is legal only a FFL with a SOT can own a post sample (After 1986 registration) and has to dispose of it legally once the SOT status ends.
      This of course is only based on BATF administrative rulings. If you go with a super strict interpretation they could say that even dealers couldn’t own them .Of course that would make it kind of hard for Law Enforcement to get NFA devices made overseas.

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