It is finally possible to use the NICS appeal process for NFA denials

Posted on May 29, 2024 by John Pierce

While those of us in the legal community have been helping clients file NICS Appeals and Voluntary Appeal File Applications since their inception, they were not designed with NFA applications in mind.

In fact, since July 13, 2016, when the ATF promulgated Rule 41F which moved all NFA background checks to the FBI, the official position of the FBI has been that NFA background checks are not standard NICS checks and therefore, the NICS Appeal process was not available for NFA denials.

However, starting in January of 2024, the ATF and FBI finalized an agreement to allow those denied when undergoing an NFA background check to use the standard NICS appeal process (what the FBI calls a “Firearm Related Challenge”) to dispute the basis of the denial.

They also formalized a method for those whose NFA applications are returned as ‘delayed/open’ by the FBI to use the Voluntary Appeal File (VAF) process to submit information that will allow the FBI to consider the issuance of a Unique Personal Identification Number (UPIN).  If a UPIN is issued and used in future applications, it should avoid the research delays that can lead to ‘delayed/open’ dispositions on NFA applications.

It is important to note that, despite the fact that both “NICS Appeal Process” and “Voluntary Appeal File” have the word ‘appeal’ in them, neither of these processes is an actual appeal of a specific NFA application.  Rather, they are challenges to the information on your record that led to the denial or delay/open disposition.

If your ‘appeal’ is successful, then it does not reverse the denial.  Rather, a new NFA application will need to be submitted, including any UPIN that may have been issued.

If you have received a denial or delay/open disposition status on your NFA application and would like assistance, then feel free to contact me.

Posted in 41F, Administrative Law, ATF, ATF Ruling, Background Checks, BATFE, FBI, NFA Denials, NFA Open Disposition, NFA Transfers, NICS, Prohibited Persons | Comments Off on It is finally possible to use the NICS appeal process for NFA denials

Why the new eForms processing rules are actually good news for trust applicants

Posted on March 2, 2024 by John Pierce

The ATF recently announced a number of changes to the way they process NFA applications.

Details of the changes can be found in the FAQ section of eForms when you log into your account.

In online forums, many have reacted by stating that the ATF is giving preferential treatment to individual applicants and questioning whether trusts remain the preferred method of NFA item ownership.

I assure you that they do.  Trusts continue to offer  usage, asset protection, and estate planning benefits that individual ownership cannot provide.

As for the changes themselves, the ATF describes them as follows:

These changes seem to be working.  We have already started to see dramatic results as some applicants are reporting turnaround times of weeks or even days for recently submitted forms.

But what about trust applicants?  The ATF has this to say:

So does that mean the changes offer no benefits to trust applicants?  Not at all!  To borrow a phrase from economics, a rising tide lifts all boats.  In fact, one of my trust client with a squeaky-clean record and a unique name reported that they applied for 6 suppressors using my trust and they were approved in 24 hours.  While I do not expect this to be common, it does illustrate my point perfectly.

As for the list of factors that could result in trusts taking longer, let’s look at them one at a time.  Because, when using a properly prepared NFA trust, such as the one I provide, where the owner of the trust is given proper guidance and assistance, most of the factors listed are mitigated or completely eliminated.

For example:

  1. When they see the same trust from the same attorney over and over again, which is true when using my trust, they do not have to read the entire document every time but can rather quickly review the pertinent sections to determine responsible persons, etc;
  2. The guidance I provide on the schedules themselves make it clear who needs to submit a responsible person questionnaire, etc., reducing errors; and
  3. By following my advice regarding minimizing responsible persons, most trust applications also only have a single background check just as is the case with individual applications.

And even if the trust review process itself does make trust applications take longer than individual applications, once the background check is sent to the FBI, the ‘approval upon proceed‘ improvements will equally benefit trust applicants.

Additionally, if many individual application approval times are now to be measured in days, then I would expect many trust applications to be reduced to weeks.

Over the next few months, we will see how the process changes actually impact trust applications.  But do not let the ATF or naysayers deprive you of the ability to share and easily pass-on your NFA items merely for a few weeks’ quicker approval.

Posted in ATF, BATFE, eForms, Form 1, Form 23, Form 4, NFA Transfers, NFA Trusts | Comments Off on Why the new eForms processing rules are actually good news for trust applicants

Understanding the confusing March 1 ATF eForms email

Posted on March 2, 2024 by John Pierce

During the last week of February, eForms was down for several days, affecting submissions from FFLs and gun-owners alike.

On Friday March 1, the ATF sent out an email to all eForms users announcing that the eForms system outage was over.

The email they sent was as follows:

Since this email was sent, my phone has been ringing off the hook with customers asking how to file a Form 2 by Monday and why they need to do so.

Is it too much to ask for the ATF to have considered the breadth of the audience they were emailing?  It would have reduced the anxiety of thousands if they would have just added a few clarifying words to the email.  Maybe something like the following:

To summarize … unless you are a licensed importer or manufacturer, the only part of this message that applies to you is the notification that the outage is over.

Posted in ATF, BATFE, eForms, Form 2 | Comments Off on Understanding the confusing March 1 ATF eForms email

Buying a firearm on behalf of a corporate entity

Posted on December 12, 2023 by John Pierce

I was recently contacted by a client who wanted to acquire several shotguns for their skeet shooting club.  I should note that they also served as an officer of the club and a member of the board of directors, which will be important later in our analysis.

My client was uncertain how such an acquisition should be handled in order to avoid making any legally false statements when completing the necessary background check forms.

Given the ever-increasing legal scrutiny facing gun owners, it is understandable that my client wanted to make sure they were handling this process correctly.  After all, answering question 21.a. on the form 4473 “Are you the actual transferee/buyer of all of the firearm(s) listed on this form?” incorrectly can lead to charges of committing a ‘straw purchase’ as well as making a false statement on a background check form.

So … is it possible?  And if so, how should an officer complete the form 4473 when purchasing a firearm for an organization?

The good news is that it is possible (at least in Virginia … see disclaimer below regarding other states).

The steps are actually quite simple:

  1.  The organization (corporation, LLC, etc.) should officially pass a resolution authorizing the buyer (who should be an officer of the organization) to acquire the firearm(s) on behalf of the organization.
  2. The organization should file this resolution in their minute book and provide a copy to the officer who will be making the purchase.
  3. The officer should prepare a written statement, executed under penalties of perjury, stating:
    1. the firearm is being acquired for the use of and will be the property of that business entity; and
    2. the name and address of that business entity.
  4. The officer should take both the corporate resolution and the written statement with them to the dealer.
  5. The officer should complete Section B of the form with his/her personal information and sign Section B.
  6. The corporate resolution and written statement should both be provided to the dealer for attachment to the completed 4473.

This is a distillation of the information provided in the form 4473 instructions on page 4 which states:

When the transferee/buyer of a firearm is a corporation, company, association, partnership, or other such business entity, an officer authorized to act on behalf of the business must complete Section B of the form with his/her personal information, sign Section B, and attach a written statement, executed under penalties of perjury, stating: (A) the firearm is being acquired for the use of and will be the property of that business entity; and (B) the name and address of that business entity.

Once the firearm is acquired, the firearm should be recorded as an asset of the corporation, and proper records should be maintained.

DISCLAIMER:  This guide is designed specifically for Virginia.  I am not licensed to practice law outside of Virginia and local or state restrictions may apply in other states.

Posted in 4473, ATF, BATFE, Federal Law, FFL Issues, NICS, Purchasing Firearms | Comments Off on Buying a firearm on behalf of a corporate entity

Recent arm brace ruling may impact those who received a tax-free amnesty form 1 approval

Posted on November 12, 2023 by John Pierce

When those who applied for a tax-free amnesty form 1 registration pursuant to ATF Final Rule 2021R-08F began to receive approvals, I posted an article about the conditions noted on the approved forms.

In that article, I predicted the listed conditions (see image below) might impact applicants in the future if the rule were to be overturned or blocked via injunction.

As I noted at the time:

  1. These are items that the ATF has decided were illegal SBRs from their time of manufacture.
  2. The ATF has, in their eyes, magnanimously agreed to give owners of these ‘illegal SBRs’ an amnesty period and free form 1 approval if they choose to register them.
  3. With this free form 1 approval, the user can put an actual stock on the resulting ‘SBR’ in place of the arm brace.  In other words, it is a full-blown SBR from that point forward, and the owner received that approval for free.
  4. It is possible that the rule might be subject to an injunction or be outright overturned in the future.
  5. If that happens, those that have these conditional form 1 approvals will be in possession of an actual SBR with an actual stock … and they didn’t pay the tax on it.

What I interpreted the condition to mean is that, should the rule be overturned, these approvals will no longer be valid and will be removed from the NFRTR.

However, we are in an intermediary stage where it has not yet been struck down but has been blocked by a nationwide injunction out of a Texas Federal District Court in the case of Britto v. ATF.

While we have no idea how long the injunction will be in place, while it is in effect, it is my legal opinion that these approvals are not currently valid.  Therefore, I advise those with a free form 1 registration who have configured these items with something other than an arm brace to remove all stocks, vertical foregrips, or other characteristics you have added that make the item an SBR and return it to a pistol configuration ASAP!  Note that the arm brace can still be left on the firearm.

Could I be wrong in my interpretation?  Of course.  But out of an abundance of caution, I would encourage my clients to not put themselves in legal jeopardy.

If you wish, you may sign up to get email updates whenever I post new content on my website, including any updates on the arm brace legal challenges.

Posted in Administrative Law, AR Pistols, Arm Brace, ATF, ATF Ruling, Court Rulings, Form 1, Regulatory Rulemaking, SBR, Short Barreled Rifles, Stabilizing Brace, Tax Stamp | Comments Off on Recent arm brace ruling may impact those who received a tax-free amnesty form 1 approval