ATF 41F Explained

ATF 41F has taken effect. Here is what you NEED to know.

The dreaded day is here, but it isn’t as bad as it could have been. On January 4, 2016, the Obama administration released the final version of the long dreaded rule change, ATF Rule 41F, which addresses how the ATF handles the procedures for NFA applications from trusts or business entities. The new rule will certainly impact how your gun trust works in the future, but there are opportunities to minimize the impact. Indeed, a premium gun trust from onlineguntrust.com creates unique opportunities under the new rule that low-end trusts simply cannot.

When did the rule take effect?

July 13, 2016. Since the rule has now taken effect, all applications to the ATF to purchase or make NFA firearms will be subject to it. No one is immune.

How does the rule affect me if I currently have a trust or own NFA firearms?

The rule plainly states that it is not retroactive and therefore the rule will not apply to previously approved applications (NFA firearms you already own) or to pending applications. An applications that were post marked on July 12, 2016 or before will be processed under the old rules. All new applications post marked on or after July 12, 2016 will be subject to it.

How does the rule affect me if I don’t currently have a trust or own NFA firearms?

All future applications to make or buy NFA firearms will be subject to the new rule now. If you do not plan on making or buying any NFA firearms, the rule will likely never affect you, though it could if you are named as a beneficiary or successor trustee on someone else’s trust.

How do I purchase a NFA item from a dealer or manufacture my own if I have a Gun Trust?

Purchasing a NFA item from a dealer with a Form 4. Click to expand.

1. Select the firearm at your dealer of choice and make required payment for it. Our preferred dealers, who know what they are doing, can be found here.

2. Complete the ATF Form 5320.4 (Form 4) with the Dealer’s assistance. If you are buying through a dealer, he or she will most likely complete this for you. If you are buying from a private party, you will need to complete this in conjunction with that private party. Box 2a will likely be the name of your trust and your home address. The full form, as available from the ATF, has three copies in it, and you will complete all three as wet-ink originals – two will be sent to the ATF, while the other will go to your Chief Law Enforcement Officer (CLEO).

3. Complete ATF Form 5320.23 (Form 23) for all “Responsible Persons” in your trust, as defined in 27 CFR§ 479.11 (definition below). The full form, as available from ATF, has two copies in it, and you will complete both as wet-ink originals – one will be sent to ATF, while the other will go to your CLEO. Included on the form is the requirement to attach a 2×2 photograph of each responsible person on the ATF copy (not the CLEO copy), clearing showing a full front view of the features of the responsible persons with a bare head, with the distance from the top of the head to the point of the chin approximately 1.25 inches, and which shall have been taken within 1 year prior to the date of the application. Each responsible person must also submit two properly completed FBI forms FD-258 (fingerprint cards) to the ATF. Your CLEO is not sent fingerprint cards. All Responsible Persons must sent form 23 to their CLEO. So if you have a trustee that lives in another state, they should mail a copy to their CLEO.

4. Once you have your form 4 and form 23 completed, including the photo and fingerprints for all responsible persons in your trust, you must submit the CLEO copies of the Form 4 and all Form 23s to your CLEO. Your CLEO is the local chief of police, county sheriff, head of the State police, or County prosecutor.

5. Make out a check to the BATFE for the required amount of the transfer tax ($200 for all NFA firearms except for “Any Other Weapons” (AOW)) which is a $5 transfer tax. List the manufacturer and serial number of the firearm on the memo line of the check.

6. Photocopy your ENTIRE executed (signed and notarized) Gun Trust Agreement including schedules (for my customers, that is Schedules A and B ). You do not need to send in the instructions or other forms or ancillary documents.

7. Submit to BATFE the Form 4, Form 23s, trust and schedules, and check for the transfer tax to the NFA Branch of the BATFE for review and approval. Many local dealers will help you with this. Mail to the following address:

National Firearms Act Branch
BATFE
P.O. Box 5015
Portland, OR 97208-5015

8. Wait several months for ATF to approve your transfer. The wait time varies with NFA Branch staffing and workload. You can get an idea of current wait times here.

9. Once approved, ATF will send the approved form 4 back to the Dealer/seller. Then, update your Schedule A with the information about the newly approved item once you receive the stamp back. If rejected by ATF, correct your paperwork with your Dealer or attorney’s help and resubmit. It generally takes about 10-14 days for approval after that, though time frames may vary wildly right now.

10. If you decide to acquire another NFA firearm…repeat this process.

Manufacturing your own NFA item with a Form 1. Click to expand.

1. Decide what type of firearm you would like to build. Applications to make new machine guns will NOT be approved, though you may be able to reactive a DEWAT. You will need to know some particular pieces of information before you submit paperwork to the ATF – such as caliber, barrel length, and overall length if you are going to make a short barreled rifle (SBR). Do not acquire the parts to build the NFA firearm at this time – that is risky because possessing the parts before you have approval to build could be construed as you having legal possession of the NFA firearm. Of course, it can be hard to state definitively the barrel length and overall length of your proposed SBR if you cannot buy the barrel now and ensure you have it so it doesn’t become unavailable later. One common strategy is to buy the parts necessary to build the item, but have trusted family members or friends hold the parts for you until you have approval. Be sure that the trusted family or friend do not themselves illegally possess an NFA firearm (or close enough) when your parts are combined with theirs. Instruct the person to not return the part to you until you have ATF approval to build.

2. Complete the ATF Form 5320.1 (Form 1). Box 2 will likely be the name of your trust and your home address. The full form, as available from the ATF, has three copies in it, and you will complete all three as wet-ink originals – two will be sent to the ATF, while the other will go to your Chief Law Enforcement Officer (CLEO).

3. Complete ATF Form 5320.23 (Form 23) for all “Responsible Persons” in your trust, as defined in 27 CFR§ 479.11 (definition below). The full form, as available from ATF, has two copies in it, and you will complete both as wet-ink originals – one will be sent to ATF, while the other will go to your CLEO. Included on the form is the requirement to attach a 2×2 photograph of each responsible person on the ATF copy (not the CLEO copy), clearing showing a full front view of the features of the responsible persons with a bare head, with the distance from the top of the head to the point of the chin approximately 1.25 inches, and which shall have been taken within 1 year prior to the date of the application. Each responsible person must also submit two properly completed FBI forms FD-258 (fingerprint cards) to the ATF. Your CLEO is not sent fingerprint cards. All Responsible Persons must send form 23 to their CLEO. So if you have a trustee that lives in another state, they should mail a copy to their CLEO.

4. Once you have your form 1 and form 23 completed, including the photo and fingerprints for all responsible persons in your trust, you must submit the CLEO copies of the Form 1 and all Form 23s to your CLEO. Your CLEO is the local chief of police, county sheriff, head of the State police, or County prosecutor.

5. Make out a check to the BATFE for the required amount of the transfer tax ($200 for all NFA firearms including for “Any Other Weapons” (AOW)). List the manufacturer and serial number of the firearm on the memo line of the check.

7. Submit to BATFE the Form 1, Form 23s, trust and schedules, and check for the transfer tax to the NFA Branch of the BATFE for review and approval. Mail to the following address:

National Firearms Act Branch
BATFE
P.O. Box 5015
Portland, OR 97208-5015

8. Wait several months for ATF to approve your application. The wait time varies with NFA Branch staffing and workload. You can get an idea of current wait times here.

10. If you decide to acquire another NFA firearm…repeat this process.

A family member or other loved one died and they owned NFA firearms. What do I do now?

The answer depends on many facts:

- Where the firearms actually registered to the person in the NFRTR?
- Where the person lived?
- What form of ownership did they own the NFA firearms in (individually, trust, LLC, corporation, etc)?
- What does the trust or corporate governance documents say?
- Who are the persons heirs/beneficiaries? Where do they live?
- Who is the remaining trustees or successor trustee if the items were owned by the trust? Where do they live?
- Who are the remaining members, managers, partners, shareholders, or officers of the business if the items were owned by a business? Where do they live?
- Does the estate need to be probated?
- Did the person move across state lines without completing ATF Form 20 while they were alive?

What happens with a decedent’s firearms can be a complex undertaking depending on the answers to the above questions. The short answer, is that ATF form 5 will likely be submitted to ATF to “transfer” the firearms to the dead persons heirs or beneficiaries, but that isn’t always the case. Please contact a probate/estate attorney in your area familiar with the NFA.

Who is a “responsible person” under the new rule?

Sadly, there are several definitions in the new rule that are not identical to each other, however, the most common definition, and apparently official definition, reads as follows “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. 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.” In our trusts, this means that settors/grantors and trustees (but not successor trustees) are responsible persons.

Do I have to resubmit everything if I make another purchase?

No! The rule states: “If you have had an application approved as a marker or transferee within the preceding 24 months and there have been no changes to the documentation previously provided, the entity may provide a certification that the information has not been changed since the prior approval and shall identify the application for which the documentation had been submitted by form number, serial number, and date approved.” There is a split on what this actually means – one camp argues that this only allows you to forego sending in a copy of your trust if there have been no changes, but still have to submit form 23, photographs, and fingerprints. The other camp argues that this means you can forego sending in form 23, photographs, and fingerprints, along with a copy of the trust. If that is the case, as long as you buy or make one new item every two years, you will only have to submit fingerprint cards, photographs, and the personal information contained on form 5320.23 once. Only time will tell which answer is correct as ATF starts processing applications post-41F.

What will the CLEO do with the information they receive?

The rule places no requirements on the CLEO as to what they do with the copies of applications they receive – indeed they have no federal duties at all. CLEO is welcome under the law to review, save, and store the information, or they may immediately shred it. The Rule states that “CLEO’s will have flexibility and discretion to review and maintain the information they obtain as a result of this rule in the manner that best enhances public safety in their respective jurisdictions…this final rule imposes no obligations on CLEOs but does provide them with the ability to obtain information that is potentially useful to accomplishing their missions.”

Will the e-forms system still work?

Given that e-forms has barely worked since its inception, the question is almost moot, but the answer is no. Since all responsible persons must submit fingerprints and photos, the e-forms system will be unavailable to the general public (non-SOTs).