FFL-NFA question

ISCS Yoda · Jun 19, 2023

This is not a Second Amendment issue, it is a technical question about NFA firearms held by a Class III FFL who surrenders his FFL to the ATF and is no longer in business. Gun lawyers and FFL experts only please - I'm sort of both in a limited way and I do not know this answer.

Scenario:

Individual Class III FFL gun dealer decides to no longer be in business individually. Doing everything by the book, he closes up properly and sends his records to the ATF.

When he does this he retains his inventory personally, including various NFA items. He does not obtain new tax stamps for any of the NFA items that he previously held pursuant to the Class III license.

Lawyer asks, incredulously - "What makes you think you can do that?" Answer: "They were already mine".

HUH? DO WHAT?

Clueless, incredulous lawyer figures posts this question in the Lounge to see if anyone knows something......

Doug M. · Jun 19, 2023

I am not up to speed on what paperwork would cover what stuff, but I suspect that there is a different set of paperwork required for Class III stuff with an FFL, and that might be good enough to cover it when the FFL is given up. It's a pretty arcane area of knowledge, and I don't have near enough.

2152hq · Jun 19, 2023

Chapter 14 of ATF NFA HAndbook
'Going Out of Business'
https://www.atf.gov/firearms/docs/undefined/atf-national-firearms-act-handbook-chapter-14/download

Part 14.2 Disposition of NFA Firearms (other than post 1986 Machineguns)

14.2.1 Sole proprietors. FFLs licensed as sole proprietors, who have been qualified to deal in NFA
firearms and who go out of the NFA business, may lawfully retain their inventory of these firearms,
including imported NFA “sales samples”, in their individual capacity. No NFA transfer occurs that
would require an ATF-approved transfer because the firearms are still possessed by the same person to
whom they were previously transferred and registered. However, any firearm registered to the
individual as a “sales sample” would continue to bear the “sales sample” restriction on any subsequent
transfer, unless the firearm is being transferred to a government agency. Thus, the transfer of a “sales
sample” to other than a government agency will only be approved if the transferee is an FFL/SOT
qualified to receive such samples.219 Since the registered owner of the firearm is no longer an FFL/SOT,
the owner’s subsequent transfer of the firearm to other than a government agency would be subject to
transfer tax and require approval of an ATF Form 4. NOTE: If an NFA firearm registered to a sole
proprietor as a “sale sample” becomes part of the person’s estate upon his/her death, the firearm may
not be registered to a beneficiary of the estate unless the beneficiary is qualified to deal in NFA sales
samples.

There are other explanations for Corporations, Partnerships, etc.

Link to entire ATF NFA HAndbook
(The book holds much interesting info )

National Firearms Act Handbook | Bureau of Alcohol, Tobacco, Firearms and Explosives

NewLiberty · Jun 19, 2023

As noted above, it depends on the business structure that the FFL was operating under.

Also, are the NFA items pre-samples, post samples, or tranferrables? As each category could have to be handled differently.

ISCS Yoda · Jun 19, 2023

NewLiberty said:
As noted above, it depends on the business structure that the FFL was operating under.

Also, are the NFA items pre-samples, post samples, or tranferrables? As each category could have to be handled differently.

Sole proprietorship, so I think the answer above satisfies the questions. I believe all of the items under discussion were suppressors and pre-1987 transferable firearms.

BigBoy99 · Jun 20, 2023

Who's name is listed on the Form 4s? If the business is listed on the Form 4, then the business owns the NFA item. If person name in on the Form 4, then he owns the item.

ISCS Yoda · Jun 22, 2023

BigBoy99 said:
Who's name is listed on the Form 4s? If the business is listed on the Form 4, then the business owns the NFA item. If person name in on the Form 4, then he owns the item.

Person dba company type name

FFL-NFA question

ISCS Yoda

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Doug M.

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2152hq

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NewLiberty

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ISCS Yoda

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BigBoy99

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ISCS Yoda

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