ATF 41F: There’s a Horse in Here Somewhere, but I Haven’t Found It!

Having read the relevant parts of the 41F document released Monday, December 4th, here are some of my thoughts.

First, the actual rule:

479.11 Meaning of terms.

* * *

Person. A partnership, company, association, trust, corporation, including each responsible person associated with such an entity; an estate; or an individual.

* * *

Responsible person. 1.) In the case of an unlicensed entity, including any trust, partnership, association, company (including any Limited Liability Company (LLC)), or corporation, any individual who possesses, directly or indirectly, the power or authority to direct the management and policies of the trust or entity to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the trust or legal entity. 2.) In the case of a trust, those persons with the power or authority to direct the management and policies of the trust include any person who has the capability to exercise such power and possesses, directly or indirectly, the power or authority under any trust instrument, or under State law, to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the trust. Examples of who may be considered a responsible person include settlors/grantors, trustees, partners, members, officers, directors, board members, or owners. An example of who may be excluded from this definition of responsible person is the beneficiary of a trust, if the beneficiary does not have the capability to exercise the powers or authorities enumerated in this section. (emphasis and numbers supplied, except in the section heading, here and below)

Okay, now, let’s see if I’ve got this straight:

Under § 479.11, “in the case of an unlicensed entity, including any trust, partnership, association [etc],” I am a “responsible person” if I “possess, directly or indirectly, the power or authority to direct the management and policies of the trust or entity to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the trust or legal entity.”

Correct so far?

But what about the next sentence? There I learn that “in the case of a trust, those persons with the power or authority to direct the management and policies of the trust [meaning “those persons” referred to in the first sentence, I assume] include any person who has the capability to exercise such power [which power? well, it must be “the power or authority to direct the management and policies of the trust or entity to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the trust or legal entity,” as explained in the first sentence] and possesses, directly or indirectly, the power or authority under any trust instrument, or under State law, to receive, possess, ship, [etc. etc.] for, or on behalf of, the trust.”

Do you see the problem? It seems to me that the second sentence in the definition of a “responsible person” essentially states the “receive, possess, ship, transport” language twice, the first time by implication, that is, by referring back to the first sentence via the words “such power.” It states the “receive, possess, ship” language explicitly the second time, but adds the critical word “and” before the word “possesses.”

Am I missing something here? If not, then my question is: Does the second sentence stand apart and alone from the first sentence, or does the second sentence refine and narrow the first sentence? In other words, with regard to trusts, is “responsible person” defined one way or two different ways in § 479.11?

In the alternative, maybe the words “such power” in the second sentence refer back only to the words “power or authority to direct the management and policies of the trust” a few words back in the same sentence. That reading makes more sense, but even so, I’m left wondering whether the rule has one or two definitions of “responsible person” for trusts.

On a separate note, someone today was touting the importance of the word “and” before the word “possesses” in the second sentence. There are really two important “ands” in the definition: the one before “possesses” and the one between “management and policies.” Thus, for example, if the trust instrument explicitly granted a co-trustee the power or authority to direct the management but withheld the power or authority to direct the policies of the trust, arguably, that co-trustee wouldn’t be a responsible person, would s/he?

And finally, what does the word “capability” mean in the context of “such power” and how important is the word “direct”? (Very important, I would argue.)

Oh, and one more: did anyone notice the plurals “powers or authorities” in the beneficiary example at the end of the definition of “responsible person”? It’s the only use of those plurals in the entire document.

Of course, all this may be beside the point, given how often and how poorly paraphrased the definition of “responsible person” is used throughout the 248 page document. Take a look at pages 4, 32, 105, 114, 118-119, 124-125, 137, 145-146, and 209-210. On one page, the paraphrase/explanation seems to clarify who qualifies as a “responsible person.” On the next, clarity takes a holiday.

For example, consider pages 118-119 of the commentary (emphasis all mine):

First the commentary tells us that “the definition of ‘responsible person’ in this final rule applies to those who possess the power or authority to direct the management and policies of an entity insofar as they pertain to firearms.” (Note that the bolded words do not appear in the actual rule. The concern seems to be with management and policies.)

Then the goal posts shift to “[in trusts] those possessing trust property—trustees—are also the individuals who possess power and authority to direct the management and policies of the trust insofar as they pertain to trust property, including firearms.” (Note here, the additional underlined words, also not part of the actual rule. Also note that we’re now talking about “possessing trust property” and “management and policies.”

Then the goal posts move again—it appears to me, at least—when the commentary “clarifies” that the rule doesn’t apply to “individuals who would not, or could not, possess the firearms.” (Note the absence of the “management and policies” element. Possession of firearms seems key.)

Finally, those damn goal posts move to another end zone, when the commentary informs us that “beneficiaries and other individuals may be considered “responsible persons [if they have the] capacity to control the management or disposition of a relevant firearm on behalf of a trust or legal entity.” (Note that the word dispose appears in the actual rule; however, the combination management or disposition appears just once in the entire document—and you’re reading it. By the way, among the various meanings of “dispose” or “dispose of,” at least one is apt to the rule: “to transfer to the control of another.”)

My concern is that the seemingly constant insertion of new or different words into the “responsible person” equation makes it very difficult if not impossible to determine the proper course of action.

To be fair, as I read and re-read the rule and commentary, things seem clearer. That said, as I read and re-read the picture sometimes becomes muddier. For the moment, all I can think is, What a confusing mess.

Don’t go too far away campers. More to come.

ATF 41P Becomes 41F: And the final answer is . . . .

So Attorney General Loretta Lynch put her pen to paper yesterday, and the ATF’s proposed rule 41P became its final rule 41F–with modifications. Here’s my first take: There’s best news, good news, and bad news. 

The best news is two-fold: 1. the final rule does not become effective until 180 days after its publication in the Federal Register, and 2. the final rule eliminates the need for your local CLEO’s signature, though it does require notification of the CLEO.

The good news is that your existing NFA gun trust remains an effective tool for managing and sharing your NFA arms, especially for the next 180 days, but even after that–assuming it’s drafted properly. Given that the effective date is at least 180 days off, you should be able to purchase and handle your NFA firearms as you have in the past–assuming, of course, that you’ve done that legally–for at least the next six months.

The bad news is that the new rule, besides eliminating the CLEO signature requirement, also introduces a new definition– “responsible person” –into the mix. Persons in a trust and other legal entities (LLCs etc.) who meet the definition of a “responsible person” will need to undergo a background check, including providing fingerprints and photo, whenever they purchase or transfer an NFA item, much like individuals do now.

The term “responsible person” very clearly includes the Grantor/Trustee. It somewhat less clearly does not include many or most beneficiaries. Thus, if you’re the grantor and trustee of your NFA trust, you will clearly be a “responsible person” when the rule becomes effective; your beneficiaries will probably not.

As for persons you may appoint as co-trustees, for the moment, they occupy a grey area–again, when the rule becomes effective. The rule itself seems quite clear, but much of the ATF commentary that accompanies the rule muddies the water (the rule and commentary run 248 pages, only 10 of which are part of the actual rule). I want to study the document and resulting issues more thoroughly before I give my final answer on the “muddier” questions.

So consider this a heads up. I’ll keep you informed as things and my thinking develop. But to repeat: the effective date of the rule is at least 180 days out, so those with an existing NFA trust have plenty of time to adjust things if needed.


Whither ATF 41P? Whither NFA Gun Trusts?

In a post back in September 29th of this year, I wrote about the reluctant Chief Law Enforcement Officer or CLEO problem or obstacle that many hopeful purchasers of NFA firearms encounter when they try to buy a suppressor, short barreled shotgun, or other such that are legal in many, if not most, states. What problem you ask? The problem that in order for individuals to purchase such items, they must submit their photograph, fingerprints, and signed certificate from the local CLEO, certifying that he or she has “no information indicating that the receipt of the firearm would place the transferee [the individual] in violation of State or local law or that the transferee will use the firearm for other than lawful purposes” (CFR §479.85).

IMGP2792Not surprisingly, some CLEOS balked at signing their professional and political life away. Others refused to do so simply because they didn’t like the idea of their citizens owning such firearms. Whatever the reason, the buck stopped there. No signature, no firearm, no recourse (see questions N16 and N17, page 201 of the 2014 version of the ATF Federal Firearms Regulations Reference Guide).

And thus the gun trust. You see, the same laws, rules, and regulations that mandate the CLEO signature for an individual application, specifically provide that the same weapons can be purchased by various entities, including companies, partnerships, associations, estates, and trusts. And no CLEO signature is required when an entity rather than an individual makes the purchase. But that may change–as early as  some time in January 2016.

On Monday, September 9, 2013, the AFT proposed amending 27 CFR Part 479 to, among other things, require so-called “‘responsible persons’ of [legal entities, including trusts] to submit . . . photographs and fingerprints, as well as a law enforcement certificate” signed by a CLEO–just like individuals currently have to do. The proposal, referred to by its docket number ATF 41P, was greeted with, shall we say, a great lack of enthusiasm. In fact, the response was so overwhelming and so negative that the AFT has yet to finalize the rule. Just a few days ago, the ATF was saying that the final rule would be out by the end of December 2015. The DOJ has now changed that date to “01/00/2016.” No, I don’t know when “00” is either.

What will the final rule look like? Did the ATF pay any attention to the many well-argued comments that the rule change was not needed, that those who proposed the change had a poor understanding of trust law, that etc. etc. etc.? We’ll see in a month or so. In the meantime, I’d argue, get while the gettin’s good. If and until the rule changes, well-drafted trusts continue to be the best way to buy NFA firearms and suppressors because trustees don’t have to provide photos, fingerprints, or certificates with the local CLEO’s John Hancock. Furthermore, I’d argue that trusts are the best way–or at least a way you should consider–to own all firearms because of the protections built into well-designed gun trusts that protect grantors, trustees, and beneficiaries from committing the so-called “accidental felony.”




Have a Question About Firearms Law?

The Bureau of Alcohol, Tobacco, Firearms and Explosives’s website in general and library in particular is a treasure trove of information on firearms laws and regulations, much of it downloadable in PDF format. I’ve found the publications on this page quite helpful, especially

the Federal Firearms Regulations Reference Guide,

the Federal Firearms Licensee Quick Reference and Best Practices Guide,

the Best Practices: Transfers of Firearms by Private Sellers, and

the ATF National Firearms Act Handbook.

The first three are updated occasionally, so check the revision date. The first one is revised annually. The last link, to the AFT National Firearms Act Handbook, is not to a PDF but to webpage because it’s updated regularly.  In any case, all of these and more on the AFT’s site a excellent. Enjoy.

Are CLEOs Shirking Their Duty?

So I’ve been reading the ATF Federal Firearms Regulations Reference Guide 2014, the most current version as of March 7, 2015so you don’t have to. It’s actually an interesting read if you’re into statutes, rules, regulations, and such. Try it.  You may have a knack for deciphering dense, jargon-laden language. But if not . . . at least skip to the Questions and Answers section that begins on page 191 for a more accessible rendition of much of the law and in a format that won’t drive you to wherever you go when you don’t drink.

If you’re like me, you’ll find interesting the answers to two questions on page 210, both of which fall under Section N of the Q&A: National Firearms Act (NFA). Now as everybody who’s anybody who’s at all interested in so-called NFA firearms knows, purchasing such arms comes with its own entry among Dante’s circles of hell [insert image of such circles here to catch the already weary reader’s eye]:


This particular circle floats somewhere between Limbo and Anger, though more than one AFA firearms aficionado swears he has seen the circle hovering around Violence.

There’s a reason for this. You see, NFA firearms are a special category of six firearms or weapons that comes with its own extra set of federal rules buyers must abide before they can get their hands on their new NFA firearm–that is, if their states’ law doesn’t ban them altogether. In brief, NFA firearms include 1.) machine guns, 2.) short-barreled shotguns, 3.) short-barreled rifles, 4.) silencers or suppressors, 5.) destructive devices, and 6.) “any other weapon[s],” an odd little category that really doesn’t include just “any other weapon,” but that’s a post for another time (see USC §5845 (a)).

Now, suppose you walk into your local gun shop to buy a short-barrreled rifle as an individual. The National Firearms Act or NFA is pretty explicit. There are taxes to be paid (the seller pays, but your pocketbook takes the actual hit), stamps to be affixed, fingerprints and photos to be taken (guess whose?), firearms to be identified, CLEO signatures to be secured, and finally, approval of the Secretary of the Treasury to be had. Yup, the NFA falls under the authority of the IRS. But that’s not the worst of your problems. No, your problem begins much closer to home.  With the Chief Law Enforcement Officer or CLEO in the jurisdiction where you live.

You see, because you chose to buy as an individual, the local CLEO has to decide whether to sign off on your application, certifying that s/he is

satisfied that the fingerprints and photograph accompanying the application are those of the applicant and that the certifying official has no information indicating that the receipt or possession of the firearm would place the transferee in violation of State or local law or that the transferee will use the firearm for other than lawful purposes. (CFR §479.85)

Read that again. Now, think about what you just read. Would you certify to all that? For someone you didn’t really know, who’s application just showed up in the mail? I probably wouldn’t. And I’m not alone. Apparently, many CLEOs are passing up the opportunity to put their butt on that dotted line as well.

Kind of takes the huff and the puff out of “Who does s/he think s/he is, anyway?” doesn’t it? Yes, I get the frustration of the prospective NFA firearms owner. But having read that little snippet from the Code of Federal Regulations (CFR), I get the reluctance of the CLEOs who don’t want to bet their career on the application of every John Doe and Jane Smith that lands on their desktops. Circle of Hell doesn’t begin to describe the firestorm that would ensue should that brand new certificated NFA firearm owner use that new NFA firearm to commemorate Columbine.

But surely the CLEO must sign eventually, right? You’re a taxpayer, by cracky! And you pay their salary!! There ought to be a law!!!

Check your outrage. There apparently isn’t a law. Let’s go back to those two questions and answers on page 210 of the AFT Federal Firearms Regulations Reference Guide:

(N16) Is the chief law enforcement officer required to sign the law enforcement certification on an ATF Form 1 or ATF Form 4?

No. Federal law does not compel any official to sign the law enforcement certification. However, ATF will not approve an application to make or transfer a firearm on ATF Forms 1 or 4 unless the law enforcement certification is completed by an acceptable law enforcement official who has signed the certification in the space indicated on the form.

(N17) If the chief law enforcement official whose jurisdiction includes the proposed transferee’s residence refuses to sign the law enforcement certification, will the signature of an official in another jurisdiction be acceptable?


“No.” Can’t get much more blunt than that. Though I guess it depends on what the meaning of “no” is. (As an aside, if I were doing Q&As for the federal government, I would have written, “Sorry Charlie, better luck next time. May the Force be with you. Or some such.)

For the “individual,” there’s no joy if Mudville’s CLEO decides s/he doesn’t want to sign the certification. Unless . . . Unless the “individual” takes advantage of another provision in the CFR, a provision that has implications for who can be a transferee under the NFA, a provision that defines “person” as:

A partnership, company, association, trust, estate, or corporation, as well as a natural person. (CFR §479.11)

Thus, when the NFA says that the transferee must be identified in the application for an NFA firearm, it is only where

. . . such person [i.e., transferee] is an individual, [that] the identification must include his fingerprints and his photograph . . . . (USC §5812) (emphasis supplied)

and therefore, only in such circumstances that the local CLEO must sign off before the application can proceed.

However, if the transferee is a partnership or a corporation or a trust? (Is that too obvious a hint that a trust might be the solution to the problems of both the prospective NFA firearm buyer and the reluctant CLEO?)

Rather than going the individual route, maybe a a trust is the better option. No muss, no fuss. No fingerprints, no photos. No CLEO, no certification. All legal, all by the book. Annie gets her gun. All right. [Readers may be nodding off. Another image to get them to the end.]:


And thus was born the gun trust and your local CLEO relieved of a responsibility s/he didn’t want in the first place. The end.

A Gun Trust in Your Future?

A recent study by the University of Chicago Crime Lab published in the Journal of Preventive Medicine, coupled with a move by Senator Tim Kaine (D-Va.) to amend Section 922(d) of the Gun Control Act of 1963 (18 U.S.C. 44), provide yet another reason for gun owners to set up a gun trust.

The Chicago study involves a survey of 99 inmates of Cook County Jail. Number one among its five principal findings:

Our respondents (adult offenders living in Chicago or nearby) obtain most of their guns from their social network of personal connections. Rarely is the proximate source either direct purchase froma gun store, or theft.

In fact, purchases at gun stores and shows accounted for just 1.5% of the guns these individuals “accessed . . . during the 6 months before the current arrest.” Or, put another way,

a majority of the primary guns (40 of the 48 for which we have detailed information on the source) were obtained from family, fellow gang members, or other social connections; the fraction is still higher for secondary guns. (emphasis supplied)

According to the study, the chain of transactions typically looks something like this:

2015-09-09_1629_Chicago Study

So now comes Kaine and his amendment to Section 922(d), an amendment which effectively puts the same burden on private persons–often family members and friends–that already rests on the shoulders of Federal Firearms Licensees or FFLs. That is,

Unless the transferor has taken reasonable steps to determine that the recipient is not legally barred from possessing firearms or ammunition under paragraphs (1) through (9), it shall be unlawful for any person to sell or otherwise dispose of any firearm or ammunition to a person who
(1) is under indictment for, or has been convicted in any court of, a crime punishable by imprisonment for a term exceeding one year;
(2) is a fugitive from justice;
(3) is an unlawful user of or addicted to a controlled substance . . .;
(4) has been adjudicated as a mental defective . . .;
(5) [is an illegal alien];
(6) has been discharged from the Armed Forces under dishonorable conditions;
(7) [has renounced his citizenship];
(8) [is subject to a restraining order because of harassment, stalking, threatening, and the like]; or
(9) has been convicted in any court of a misdemeanor crime of domestic violence. (emphasis supplied; underlined language is Kaine’s proposed amendment; aspects of items (1)-(9) have been paraphrased for length)

Among many of the knocks against this proposal is that it imposes a burden–the same potential penalty gun dealers face–without offering relief–the ability to do background checks using the FBI’s NICS database. If Kaine’s bill (or any bill like it) passes, a well-drafted gun trust could be the shelter from the ensuing storm, from the increased potential of the unintentional or accidental felony that could result from being unable to perform an adequate background check. Why? Because that trust will contain provisions that spell out, for the trustees and beneficiaries, who can and who cannot qualify as a potential transferee of any of the guns that make up the corpus of the trust. In short, they will know–without having to Google the answer–that persons who fit in categories (1) through (9) do not qualify.

Look, the NRA and other gun advocates may beat back Kaine’s attempt to impose liability on private persons who unknowingly transfer guns to legally barred dudes and dudettes. But given the Chicago study which points the finger directly at family members and social connections as the source of most illegal guns on the streets of Chicago, don’t be surprised if Kaine’s bill has legs. And if it does, it seems at least arguable that a well-drafted gun trust would be one large reasonable step towards satisfying the legal standard established in Kaine’s proposed legislation.

That’s the beauty of gun trusts. Rather than a way to circumvent the law, they’re actually a method of safely and legally transferring the guns you treasure to the people you care about–so long as those people haven’t been walking on the wrong side of the law. Should you have one?

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