http://blog.princelaw.com/2014/05/1...or-manufacture-of-new-machineguns-for-trusts/
Did ATFâs Determination on NICS Checks Open the Door for Manufacture of New Machineguns for Trusts?
It isnât often that I find myself giving advice that is more restrictive than ATFâs interpretations but it appears that ATF recently changed that dynamic when it held that an âunincorporated trustâ was not a âpersonâ under the Gun Control Act. Before I give you the answer to the question youâre pondering, letâs first review the background, issues and the law.
On June 21 2013, Dakota Silencer submitted a request to ATF seeking clarification, because of conflicting information it was being provided from different field offices (as they have multiple FFLs in multiple states), as to whether a National Instant Check System (NICS) check was required on the transfer of National Firearms Act (NFA) firearm registered to a trust on a Form 4. The specific question, as ATF framed it, was whether âa NICS check must be conducted on the person picking up the firearm on behalf of the trust.â
On March 17, 2014 (yes, almost a year later), Helen L. Koppe, Chief, Firearms Industry Programs Branch, responded. You can find a copy of the response here. ATF determined that âUnlike individuals, corporations, partnerships, and associations; unincorporated trusts do not fall within the definition of âpersonâ in the GCA.â And therefore, as a result,
Because unincorporated trusts are not âpersonsâ under the GCA, a Federal firearms licensee (FFL) cannot transfer firearms to them without complying with the GCA. Thus, when an FFL transfers an NFA firearm to a trustee or other person acting on behalf of a trust, the transfer is made to this person as an individual (i.e., not as a trust). As the trustee or other person acting on behalf of the trust is not the approved transferee under the NFA, 18 U.S.C. 5812, the trustee or other person acting on behalf of a trust must undergo a NICS check. The individual must also be a resident of the same State as the FFL when receiving the firearm.
So, ATF, trying to be cute and find a way to require NICS checks without Congressional action, declared trusts not to fit the definition of a âpersonâ under the GCA. No big deal, especially for us in Pennsylvania, as Pennsylvania Instant Check System (PICS) checks are already required for all NFA firearms, except silencers. But, not so quickâ¦letâs look at Section 922(o) of the Gun Control Actâ¦
Section 922(o) provides:
(1) Except as provided in paragraph (2), it shall be unlawful for any person to transfer or possess a machinegun.
(2) This subsection does not apply with respect toâ
(A) a transfer to or by, or possession by or under the authority of, the United States or any department or agency thereof or a State, or a department, agency, or political subdivision thereof; or
(B) any lawful transfer or lawful possession of a machinegun that was lawfully possessed before the date this subsection takes effect.
So, we have a prohibition on any âpersonâ transferring or possessing a machinegun which was not lawfully registered before May 19, 1986. BUT, an unincorporated trust is not a âpersonâ under the GCA, so this provision cannot apply to it.
In turning to the National Firearms Act, as amended, 26 U.S.C. 5801, et seq., we find that a âpersonâ is defined as including a trust, pursuant to 26 U.S.C. 7701. Yet, there exists no 922(o)esque provision in Section 5801, et seq.
Therefore, pursuant to 26 U.S.C. 5812 and 5822, an unincorporated trust may lawfully transfer and make machineguns, as it is not a âpersonâ for purposes of the GCA and Section 922 only applies to âpersonsâ as defined by the GCA. And yes, this opens up a lot more issues for ATF in relation to the purchase of firearms by trusts under the GCA. Someone isnât likely to be employed much longerâ¦
I will continue to update our viewers, as I have already submitted a Form 1 Application for a minigunâ¦oh hell yeah I didâ¦
Did ATFâs Determination on NICS Checks Open the Door for Manufacture of New Machineguns for Trusts?
It isnât often that I find myself giving advice that is more restrictive than ATFâs interpretations but it appears that ATF recently changed that dynamic when it held that an âunincorporated trustâ was not a âpersonâ under the Gun Control Act. Before I give you the answer to the question youâre pondering, letâs first review the background, issues and the law.
On June 21 2013, Dakota Silencer submitted a request to ATF seeking clarification, because of conflicting information it was being provided from different field offices (as they have multiple FFLs in multiple states), as to whether a National Instant Check System (NICS) check was required on the transfer of National Firearms Act (NFA) firearm registered to a trust on a Form 4. The specific question, as ATF framed it, was whether âa NICS check must be conducted on the person picking up the firearm on behalf of the trust.â
On March 17, 2014 (yes, almost a year later), Helen L. Koppe, Chief, Firearms Industry Programs Branch, responded. You can find a copy of the response here. ATF determined that âUnlike individuals, corporations, partnerships, and associations; unincorporated trusts do not fall within the definition of âpersonâ in the GCA.â And therefore, as a result,
Because unincorporated trusts are not âpersonsâ under the GCA, a Federal firearms licensee (FFL) cannot transfer firearms to them without complying with the GCA. Thus, when an FFL transfers an NFA firearm to a trustee or other person acting on behalf of a trust, the transfer is made to this person as an individual (i.e., not as a trust). As the trustee or other person acting on behalf of the trust is not the approved transferee under the NFA, 18 U.S.C. 5812, the trustee or other person acting on behalf of a trust must undergo a NICS check. The individual must also be a resident of the same State as the FFL when receiving the firearm.
So, ATF, trying to be cute and find a way to require NICS checks without Congressional action, declared trusts not to fit the definition of a âpersonâ under the GCA. No big deal, especially for us in Pennsylvania, as Pennsylvania Instant Check System (PICS) checks are already required for all NFA firearms, except silencers. But, not so quickâ¦letâs look at Section 922(o) of the Gun Control Actâ¦
Section 922(o) provides:
(1) Except as provided in paragraph (2), it shall be unlawful for any person to transfer or possess a machinegun.
(2) This subsection does not apply with respect toâ
(A) a transfer to or by, or possession by or under the authority of, the United States or any department or agency thereof or a State, or a department, agency, or political subdivision thereof; or
(B) any lawful transfer or lawful possession of a machinegun that was lawfully possessed before the date this subsection takes effect.
So, we have a prohibition on any âpersonâ transferring or possessing a machinegun which was not lawfully registered before May 19, 1986. BUT, an unincorporated trust is not a âpersonâ under the GCA, so this provision cannot apply to it.
In turning to the National Firearms Act, as amended, 26 U.S.C. 5801, et seq., we find that a âpersonâ is defined as including a trust, pursuant to 26 U.S.C. 7701. Yet, there exists no 922(o)esque provision in Section 5801, et seq.
Therefore, pursuant to 26 U.S.C. 5812 and 5822, an unincorporated trust may lawfully transfer and make machineguns, as it is not a âpersonâ for purposes of the GCA and Section 922 only applies to âpersonsâ as defined by the GCA. And yes, this opens up a lot more issues for ATF in relation to the purchase of firearms by trusts under the GCA. Someone isnât likely to be employed much longerâ¦
I will continue to update our viewers, as I have already submitted a Form 1 Application for a minigunâ¦oh hell yeah I didâ¦
