MAJOR NEWS: ATF to Allow eForm 1s and 4s – Not Likely to Enact Regulations on Trusts

[Nimaro]

Not sure if this is a repost, if so please delete.

http://blog.princelaw.com/2013/08/06/major-news-atf-to-allow-eform-1s-and-4s-not-likely-to-enact-regulations-on-trusts-and-other-entities/

Today at the NSSF’s 12th Annual Import/Export Conference in Washington D.C., the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) announced that it will be accepting electronic Form 1, 4 and 5 applications for entities that do not require Chief Law Enforcement Officer (CLEO) signatures, fingerprint cards, and photographs.

ATFonline

In July of 2012, I had posted a blog regarding the ATF considering the use of e-Forms for National Firearms Act (NFA) applications, where the entity applying was other than an individual (AKA a trust, corporation..etc). Since that time, ATF has worked on devising a program that will allow Federal Firearms Licensees (FFLs) (and individuals, see below) to electronically file numerous types of NFA applications, including the Form 1 and Form 4. Specifically, ATF stated, “ATF is pleased to announce the implementation of the NFA forms into ATF’s eForms system. ATF Forms 1, 2, 3, 4, 5, 9, and 10 are currently available in eForms [sic] submission.” The announcement continues on to say, “The submission of Forms 2, 3, 4, 5, and 9 can only be done by a Federal Firearms Licensee who had paid the special (occupational) tax for the current Tax Year.” Unfortunately, because a Form 1, 4 or 5, when submitted by an individual, requires photographs, fingerprints and a CLEO signature, electronic submission will not be available if the entity applying is an individual. It will only apply to entities such as trusts, corporations and other fictitious entities.

The FFL (or individuals, see below) will have to register at www.atfonline.gov, using its FFL number and SOT number on the ATF’s site:

ATFonline-register

For payment, the FFL (or individual) will have to maintain a separate account with Pay.gov for submission of the payment; thus, requiring the FFL to obtain payment from the customer, which is technically correct pursuant to the law, as it is the obligation of the Transferor, not the Transferee, to pay the tax.

I inquired of whether an other entity (other than an individual) can register to submit Form 1 applications and I was informed by Information and Technology Specialist Lee Alston-Williams that trusts, corporations and other fictitous entities will be able to register and submit Form 1s; however, they need to deal with issues such as who should register for the account (AKA the trust? the settlor? a member of an LLC?). She requested that I contact her so that we can work through the different potential scenarios and develop a FAQ or instruction sheet to walk everyone through the proper way to register and submit the applications. There will also be “roles” in each registered users account, which will be “super user,” “delegate” and “submitter.” We will need to work on a comprehensive FAQ so that, as an example, a trust account can be properly set up with its Settlor(s), Trustee(s)…etc. I also expect to discuss with her eForm 4s, which, if both persons are in the same state and the transferor is a trust, corp, etc, that eForms should be available.

For an additional benefit of electronic submissions, by their nature, eForms will be given preferential treatment. For import applications, it should result in a 1-2 week reduction. With NFA applications, it should result in a 6 -8 week reduction. The reason for the reduction is the elimination of the data entry phase, which currently has a backlog of 6 – 8 weeks. Since the electronic data will be automatically entered into the database, no human interaction is necessary at this stage. Upon filing the eForm, provided there is no error in the submission, it will be be almost immediately placed into that examiners active/pending file for processing.

More importantly, in my opinion, this will greatly reduce the possibility of human error in entering the data into the National Firearms Registration and Transfer Record (NFRTR). I have previously written extensively on the error rate of the NFRTR in my article Violating Due Process: Convictions Based on the National Firearms Registration and Transfer Record When It’s “Files are Missing.” This change it a definite welcome change to those of us living in the electronic age.

Making all of this more interesting is ATF’s alleged desire to enter into rulemaking; whereby, it would eliminate the CLEO Signature requirement while enacting a “responsible person” requirement for other entities, such as trusts and corporations, where the responsible person would have to submit fingerprints and photographs. Why would the ATF be moving moving forward with the elimination of the CLEO signature requirement, a main aspect of which, would require entities other than individuals to submit fingerprints and photographs, which would completely nullify the electronic Form 1 and 4 application submission ability? By enacting such a regulation, all entities (which are non-FFLs) submitting Form 1 and 4 applications would be required to submit fingerprints and photographs; thereby, precluding the use of the electronic forms.

Logically, what can be extrapolated from this move towards e-Form 1 and 4 applications is that ATF will not be entering into rulemaking to change the regulations relating to what must be submitted for Form 1 or 4 applications, where it involves an entity other than an individual. Hence, I do not anticipate any movement by the ATF on the published intent to enter into rulemaking – RIN 1140-AA43 – Background Checks for Principal Officers of Corporations, Trusts, and Other Legal Entities With Respect to the Making or Transferring of a National Firearms Act Firearm.

 

[SPCAS]

Exciting news. I'm all for online forms. Cost me more money I'm sure since Ill end up doing even more

 

[Glocktogo]

I hope they don't enter into rulemaking on "responsible persons", but this is a potential avenue for detractors to go after the Trust route. It's not an absolute deal breaker on e-Forms submittal though. Current security badging applicants under 49 C.F.R. rules have electronic fingerprints and photos submitted to TSCH for processing. Since it effects employment, a 6-8 week delay in processing security threat assessments would be an undue burden on the industry. An STA with e-prints and photos takes about 3-5 business days to process for approval.

 

[mapcon1941]

If I am reading this right, it is set up for FFL and SOT holders to e-file the forms, not the person (or trust) that is applying? So for example, if I am applying for a Form 4 suppressor, the FFL doing the transfer would submit the e-file form 4, not myself?

 

[Hump66]

It says FFL or individuals.

 

[Shadowrider]

It says FFL or individuals.

Yes but in the case of individuals photos and fingerprints are required. That makes it a trust only deal the way I read it.

Unfortunately, because a Form 1, 4 or 5, when submitted by an individual, requires photographs, fingerprints and a CLEO signature, electronic submission will not be available if the entity applying is an individual. It will only apply to entities such as trusts, corporations and other fictitious entities.

 

[Glocktogo]

If I am reading this right, it is set up for FFL and SOT holders to e-file the forms, not the person (or trust) that is applying? So for example, if I am applying for a Form 4 suppressor, the FFL doing the transfer would submit the e-file form 4, not myself?

The transferor would do the e-file, but could only do it for an individual if said individual is a Trust. Let's say I as a non-FFL were selling you my privately owned NFA item. I have a pay.gov account and you have a Trust that will be the listed tranferee. We could file your Form 4 electronically and save 6-8 weeks processing, plus avoid having your transfer go into trouble status because some of the paperwork got lost in the shuffle (I've had that happen before).

 

[mapcon1941]

So an FFL/SOT could e-file a form 4 for a suppressor transfer to a trust and save some wait time. That is good news. Would have to use an FFL/SOT that has registered on atfonline.gov to do this and has a pay.gov account for tax stamp payment.

 

[Hawkeye]

I set up an account to try to see if the information could be filled out. I don't think that it is up an running quite yet.

 

[mapcon1941]

^ Agree. I also tried and my registration apparently didn't go through. I even found a PC still running IE v.8 and still no go. Hopefully will work sometime soon.