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Some NFA Myths I’m Hearing

I think some gun folks may be a bit confused as to the law (an easy thing when it comes to the NFA. I won’t claim to be an expert either). I’ve heard a few pro-gun folks say recently:

Having a “machine gun” permit, you open up your house to the ATF to come in and search your house any time they want

Whether this is true or not depends. If you get a fully transferable pre-86 machinegun because you paid your NFA transfer tax, filled out ATF Form 4, and undergone the background check, police permission and fingerprinting, and the ATF issues your stamp, you’re good to go from that point. The ATF can’t just walk into your house without a warrant because you possess an NFA tax stamp (which is, in effect, your license. Legally, it’s just proof you paid the tax, which is required for possession.).

The only time ATF inspections become an issue is if you become a licensed Class III dealer (or SOT – Special Occupational Taxpayer). These days you can’t do that if you don’t have a fixed place of business, with regular hours, that’s zoned for such purposes. The “kitchen table” dealer is largely a thing of the past.

If you have a Class III SOT and FFL, you can obtain pre-86 and post-86 dealer samples. To obtain post dealer samples, you have to have a signed letter from the local police department on letterhead stating that they wish to have a demonstration of a certain machinegun. If you get a post-86 dealer sample, you’re permitted to possess firearm as long as you retain your SOT status. For pre-86 dealer samples, you may retain the firearm even after your SOT status expires or is relinquished. Pre-86 dealer samples are generally firearms imported prior to 1986, but after 1968, when the Gun Control Act made importation of fully transferable machineguns illegal. My understanding is that prices on pre-86 dealer samples are not really any lower than fully transferable machineguns.

Many collectors obtained their own FFLs and Class III SOT status to trade in these firearms before the practice was ended, so that’s where the idea that the ATF could come into your home without a warrant probably came from. If you hold a type 1 or 2 FFL, the ATF can conduct inspections at your place of busines, and if that’s your home, then they can come into your home for inspections.

If you’re thinking of getting into NFA collecting, don’t let that fear stop you. If you get a fully transferable pre-86 machinegun, along with your stamp, the only business you need have with the ATF beyond that point is filling out ATF form 5320.20, if you want to transport your NFA firearm out of your state of residence, or to a new residence out of state.

Interesting factoid. If you possess a valid C&R license, and your NFA machinegun is C&R, you do not need to fill out 5320.20; your Type 3 FFL will do. Type 3 C&R FFLs subject you to possible ATF inspection, but not in your home. If the ATF would like to audit you, they will arrange a time at an ATF office. You don’t surrender your 4th amendment rights by having a C&R license.

Ah, yes. The joys of “reasonable gun regulations”

7 Responses to “Some NFA Myths I’m Hearing”

  1. straightarrow says:

    I am pretty sure you are in error on a couple of points. I didn’t get a C&R because of two things I read in the application. One was that I could be inspected at their whim, true, they stated that usually an appointment was made, but usually don’t feed the bulldog. The other was that I could not move my collection at my volition but only after getting the ATF’s permission based upon their interpretation of whether or not I would be considered in compliance with the law in the area to which I was moving.

    It is illegal for me to tell you what my reaction to either of those transgression would be, and will be if any sonofabitch tries to cancel my citizenship. Do not err, that is what we are talking about.

  2. Sebastian says:

    You can move your collection whenever you want, so it’s not a prior restraint on moving. If you do move, you just have to file form 5300.38 with the ATF, Application for an Amended Federal Firearms License, and send out new copies before you can use your license to acquire or dispense qualifying firearms again. It’s technically your premises that is licensed, so if you change addresses, you generally get a new FFL number. The other thing you have to do is fill out the FFL Loss/Theft form 3310.11 if a firearm goes missing or stolen. Unlike dealers, you don’t have to turn in your records if you quit.

    That’s not to say I like having to get a license to do collecting, but financially it’s a good deal, and I don’t think it’s much worse than 4473 and the NICS check. As a C&R, I don’t have to deal with any of that.

  3. Earl Harding says:

    A type 03 has the option to have the audit in their home. During the audit the auditor is only permitted to go where you permit them to go.

    So it you have the audit at you kitchen table and they want to see a specific firearm you can go and get it from the safe and they can’t leave the table. In other words, other than looking at the books they have no more rights than an insurance salesman. Of course dirung an 01 audit the inspector can go anywhere at all in the place of business.

    The issue with having the audit at the ATF office is that they can ask to see any/all of the firearms listed. This can make it a royal pain.

    Although I haven’t been audited the last person I knew who was arranged all his firearms in the same order as the book around the wall so he could find it quickly. Made the audit go very fast.

  4. Sebastian says:

    I’m hoping I never get audited, but if I did, I’d opt to have it in my home, because I’d rather make the ATF have to spend the money on transportation. I keep pretty thorough records. I have sales receipts for most of my collection that I acquired before the license. I’m not really that concerned about having an ATF agent in my house, since there’s really nothing they are going to notice that’s out of the ordinary.

    But if it becomes a hassle, or the ATF start jerking me around, I’ll drop the license. Like I said, I don’t really like that I have to get a license to do what people of my grandfather’s generation used to do unhindered, but it’s the law, unfortunately. I’ll keep lobbying to change it. One step in the right direction I’d like to see is for the type 3 FFL to apply to everything, and not just C&R.

  5. Eric says:

    Personally, I think the C&R should cover weapons of any military 25 yrs or older instead of 50 and also their semi auto copies should be legal, even though that receivers are different in some cases and have new barrels etc.

  6. Eric says:

    WHY BAN SHORT BARRELS IF THE RIFLE IS SEMI AUTO ANYWAY?????????????

  7. Hank says:

    I had a C&R for nine years and it was totally without any problems. I had 3 NFA items on form 4′s and moved during the period. Then I had a health issue and decided I would “sell” the pieces to my son. He also has a C&R and the transfer was easy. Later, I simply failed to renew my license and after a few months shredded my A&D’s. Never even a phone call from either the BATFE or the local authorities. Unless you get crosswise with the law you shouldn’t have any problems.

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