Atf 41P Update for Trusts LLCs

[Lafsnguy]

Got the following from one of my distributors.

1- FOR THE NEXT 180 DAYS THE CURRENT RULES APPLY. NOW WOULD BE A GREAT TIME TO GET YOUR SILENCERS.
2- AFTER 180 DAYS CLEO CERTIFICATION GOES AWAY AND IT BECOMES CLEO NOTIFICATION FOR BOTH TRUSTS AND INDIVIDUALS
3- AFTER 18-0 DAYS EVERY RESPONSIBLE PERSON ON A TRUST HAS TO GET A BACKGROUND CHECK INCLUDING FINGERPRINTS AND PHOTOGRAPHS.
4- ATF IS EXPLORING ELECTRONIC FINGERPRINTING IN THE NEXT 180 DAYS AND WILL PROVIDE GUIDANCE.

IF YOU WANT TO READ THE ENTIRE RULING HERE IS THE LINK.
https://www.atf.gov/file/100896/download
WE WILL DO OUR BEST TO KEEP EVERYONE UPDATED AS THIS CONTINUES.

 

[themcfarland]

Thank you for the summary..

 

[mpl006]

Does anyone know what the process would be if you amend your trust to add or remove someone? For instance, I have a 2 year old right now. When he turns 18, assuming the rules are still as they will be in 180 days, and I add him to the trust, do we have to send in his prints and picture?

 

[DAVE_M]

do we have to send in his prints and picture?

Yes.

 

[pangris1]

Will submitting pics/fingerprints be retroactive for those currently on an LLC, or added in the next 179 days?

 

[mpl006]

I New Responsible Persons and Form 5320.23
Comments Received
In the NPRM, ATP stated that it was considering a requirement that new responsible persons submit Form 5320.23 within 30 days of a change in responsible persons at the trust or legal entity, and sought opinions and recommendations. See 78 FR at 55020. A commenter provided three reasons why this change is unnecessary, unworkable, and would lead to chaos within legal entities. First, ATP only has authority under the NF A to identify applicants, which applies to responsible persons before the transfer has occurred, and is not an ongoing obligation once the transfer has occurred. Second, companies today face many situations that would make it very difficult and overly burdensome to determine who is a responsible person and submit the required information (e.g., high employee turnover, shifting.management responsibilities and roles, temporary management changes, overlaps in manager authority). In addition, many small legal entities would not have the administrative personnel to handle this required process. Third, this requirement would create much confusion and raise many questions if a potential new responsible person could not obtain the CLEO certification.
This commenter further stated that a continuing obligation to obtain approval from ATF to add each new responsible person would magnify the burdens related to the proposed CLEO certification requirement and the "responsible person" definition, particularly because legal entities have less control over managerial structure changes than they do over a decision about whether and when to acquire or make a new NF A firearm. This commenter believes that nonfirearm
related factors overwhelmingly dictate changes in personnel and managerial structure, and that complications relating to ensuring compliance with an ongoing designation obligation under the implementing regulations should not impact the personnel and managerial structure of a legal entity.
A few commenters did not recognize that ATF was only considering this change, and thought that this change was being proposed; they included their comments on the issue with comments on the proposed change to CLEO certification for responsible persons. For example, a few comm enters stated that the NPRM would impact trustees' abilities to manage trusts because of the proposed requirement that new responsible persons submit a Form 5320.23 and obtain a CLEO sign-off within 30 days of their appointment. A few other commenters stated that, by proposing that any new responsible person submit a Form 5320.23 and obtain a CLEO sign off within 30 days of the new responsible person's appointment, the proposed rule intruded upon the traditional uses of trusts and upon the rights of settlors to manage their estate plans. Another commenter, noting ATF's long-held position that certain activities, such as the sale of a company, hiring new employees, or adding new trustees are not "transfers" of firearms, stated that the rule change would improperly extend ATF's authority. This commenter statedthat ATF and DOJ incorrectly relied on their authority under 26 U.S.C. 5812(a) for the proposed change, because that section only authorizes ATF to collect information on the transferee during a transfer, not to continue collecting information on the transferee (or persons who act on behalf of the transferee) after the application is approved. This commenter asserted that the 30-day rule requirement would enable CLEOs and ATF to veto private decisions that are not the business of the government, and that Congress has not authorized such veto rights. This commenter asked ATF to consider the negative unintended consequences of the 30-day rule requirement, because its imposition would effectively mean a CLEO has to approve the sale of a company where buyers reside, the addition of trustees where trustees reside, the hiring of employees where employees reside, and the membership of an association. Further, this commenter stated that if ATF implemented this change, ATF would be violating First and Second Amendment rights, as
well as rights of privacy, when ATF's objective could be achieved by any licensed FFL performing a "discreet, confidential NICS check." Further, this commenter stated that requiring a legal entity to request and receive permission for all personnel changes would be cumbersome, impacting personnel decisions and greatly increasing hiring costs. Another commenter stated that a requirement for all responsible persons to submit Form 5320.23 and comply with the CLEO certification within 30 days would be a "radical" departure from trust law and estate planning. As a result, this commenter cautioned ATF to expect long and costly court battles, that ATF would lose, as the proposed requirements would infringe
property rights and the ability to pass trust property to legal heirs.

Department Response

The Department notes that it did not propose to make any changes on this issue in the proposed rule. Rather the Department requested input and guidance relative to identification of new responsible persons who receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, an entity. The Department is not requiring, in this final rule, that new responsible persons submit a Form 5320.23 within 30 days of any change of
responsible persons at a trust or legal entity. The Department further notes that nothing in this rulemaking has altered the requirement for trusts and legal entities to submit new applications to make or transfer (as applicable) if the trust or legal entity intends to possess additional NF A items, or if there is a sufficient change in control or ownership of the trust or legal entity such that it is considered a new or different entity under relevant law. In either case, at the time of such application, the trust or legal entity will need to identify current responsible persons, who will submit photographs and fingerprints, and undergo a background check.
Refer to section IV.C.l in this document to review ATF's shift from CLEO certification to CLEO notification-a process that alleviates the potential for administrative backlogs as a result of personnel changes, and any concerns that a CLEO may dictate the operation of an entity.

This, especially the bolded part, leads me to believe that we would not need to. Unless I'm reading it wrong, and the next sentence is very poorly written, only those that are responsible person(s) at the time of application need to have fingerprints and photograph submitted. If I keep what I have now and do not add anything in the future, after he is 18, then we would not need to submit anything on him when he is added as a trustee.

I'm not a lawyer and obviously these guys at least think they are smarter than me so I don't know.

 

[JoeLiberty]

Nice. That was my understanding as well.
This helped me clarify a few other things:
http://www.thetruthaboutguns.com/2016/01/robert-farago/who-is-a-responsible-person-on-an-nfa-trust/

So what's to stop me from dropping most of my trustees from my trust, making application for a new item on form 1 or 4, and then re-adding my un-harassed trustees?

 

[Mouthpiece]

Nice. That was my understanding as well.
This helped me clarify a few other things:
http://www.thetruthaboutguns.com/2016/01/robert-farago/who-is-a-responsible-person-on-an-nfa-trust/

So what's to stop me from dropping most of my trustees from my trust, making application for a new item on form 1 or 4, and then re-adding my un-harassed trustees?

According to my reading, nothing. The final rule, on page 209, declares, "The Department is not requiring, in this final rule, that new responsible persons submit a Form 5320.23 within 30 days of any change of responsible persons at a trust or legal entity." However, if a new application (Form 1 or Form 4) is filed, the updated documentation must be filed with ATF for all responsible parties.

Note thought that if you make another application within 24 months and you have not changed your trust, you do not have to resubmit photos and fingerprints.

 

[Mouthpiece]

Will submitting pics/fingerprints be retroactive for those currently on an LLC, or added in the next 179 days?

No. "The final rule is not retroactive and therefore the final rule will not apply to applications that are in ‘pending’ status, or to previously approved applications for existing legal entities and trusts holding NFA items." The ATF failed to define what constitutes "pending status", so those applications being sent in close to the 180 day mark may (and I say "may") end up getting bounced. My recommendation is get your applications in now and use e-file for your Form 1s.

 

[PinGorilla]

Question

If I decide to abandon my trust after this goes into effect and transfer my NFA items to myself does it require another $200 fee?

 

[mpl006]

Question

If I decide to abandon my trust after this goes into effect and transfer my NFA items to myself does it require another $200 fee?

Yes. Since the trust is considered the entity that owns the item, it would be no different than if you owned it personally and were selling it and transferring it to me. That is my understanding at least.

 

[PinGorilla]

So what's the benefit of getting in a form 1 or 4 or whatever form into the ATF using a Trust before the deadline? I'm asking this because in the article linked in post 7 the writer is suggesting it's best to just transfer items out of ur trust to yourself and not deal with the trust crap coming down the pipe.

If later the trend becomes it is best to transfer to myself I just pissed away another $200 to beat the deadline.

Opinions?

 

[Mouthpiece]

So what's the benefit of getting in a form 1 or 4 or whatever form into the ATF using a Trust before the deadline? I'm asking this because in the article linked in post 7 the writer is suggesting it's best to just transfer items out of ur trust to yourself and not deal with the trust crap coming down the pipe.

If later the trend becomes it is best to transfer to myself I just pissed away another $200 to beat the deadline.

Opinions?

The benefit of a trust remains that multiple persons can have the authority to possess and use the NFA items in the trust.

After reading the article, I'm not sure why the author suggests transferring the items to yourself individually as each transfer will cost you $200. As I stated before, I believe we will see a number of folks amending their trusts to reduce the number of trustees before their next purchase.

 

[Mouthpiece]

Question

If I decide to abandon my trust after this goes into effect and transfer my NFA items to myself does it require another $200 fee?

Yep, for each item.

 

[JoeLiberty]

So what's the benefit of getting in a form 1 or 4 or whatever form into the ATF using a Trust before the deadline? I'm asking this because in the article linked in post 7 the writer is suggesting it's best to just transfer items out of ur trust to yourself and not deal with the trust crap coming down the pipe.

If later the trend becomes it is best to transfer to myself I just pissed away another $200 to beat the deadline.

Opinions?

Pretty sure he's not suggesting transferring your trust-owned property to yourself (although I see how it could be read that way). He's suggesting that your future purchases be "transferred to" (or maybe "manufactured by") yourself and not your trust. Certainly would not make sense to dissolve your trust over this. It is still valid for all the other reasons your trust was a good idea in the first place (allowing others to possess items, allowing your beneficiaries to inherit your collection without another transfer tax or probate). Depending on your situation you may choose to keep adding to the trust instead. Most likely I will reduce the number of trustees to the greatest extent possible but keep adding items to it. A mild inconvenience to my family now may save them a major problem down the road.

My recommendation is get your applications in now and use e-file for your Form 1s.

I did this as soon as I heard^^^. I should probably do two.

 

[mpl006]

.

 

[JadeRaven]

So, what's the chance that this becomes law and we don't need to worry about this nonsense for our suppressors?

https://www.congress.gov/bill/114th-congress/house-bill/3799

 

[NOShooter]

my question becomes thus:

Once this is enacted, if you've had a form1 or form4 approved in the past 2 years, and there has been no change to your trust, do you still have to submit fingerprints and pictures for your next transfer?

OR, because you've been approved in the last year, with no changes, the need for both items is negated?

It does not seem particularly clear.

If it is the latter, this will help me justify at least 1-2 NFA purchases per year :-)

 

[Mouthpiece]

my question becomes thus:

Once this is enacted, if you've had a form1 or form4 approved in the past 2 years, and there has been no change to your trust, do you still have to submit fingerprints and pictures for your next transfer?

OR, because you've been approved in the last year, with no changes, the need for both items is negated?

It does not seem particularly clear.

If it is the latter, this will help me justify at least 1-2 NFA purchases per year :-)

The way I look at it, after the 180 days (now 178) you will need to submit photos and fingerprints for each trustee the first time you make an application. After that time the 24 month grace period begins to run.

 

[met7881]

cleo notification

Since 41p appears to eliminate the Cleo signoff and replaces it with a notification. What are the particulars on notification post card, voice mail, text etc. I have not read how it specifies this . Also instead of notifing The local CLEO (sherrif) you could also notify the DA, state police. etc.