ATF Issues Final Ruling on NFA Trusts, Eliminates CLEO Sign-Off

[PBR]

Interested in hearing from some folks better with law and understanding than me but seems like they have now made it easier for individuals cause don't have to get CLEO sign-off anymore but harder for Trusts cause of more paperwork involved now. Also little confused as too does a CLEO have to sign off on background check, finger prints and photos and if so how long will they make folks wait?

[ScottDLS]

Interested in hearing from some folks better with law and understanding than me but seems like they have now made it easier for individuals cause don't have to get CLEO sign-off anymore but harder for Trusts cause of more paperwork involved now. Also little confused as too does a CLEO have to sign off on background check, finger prints and photos and if so how long will they make folks wait?

The CLEO "signoff" on the background check was supposedly eliminated (changed to NOTIFICATION) in the final version because of the burden it would place on CLEO's for all the "responsible persons" in trusts/legal entities.

The change does add a new burden to trusts/legal entities that was not there before. Now the "responsible persons" of an entity have to be printed/photoed and have ATF conduct the background check. But really that was not the reason people were creating trusts (to get out of background check). It's always been a felony for a prohibited person acting for the entity to take physical possession. The trusts were used to bypass the CLEO's who would not sign the certifications even though they were allowed by state law. I have 3 NFA items in my name, and then the new Sheriff wouldn't sign, so I applied to manufacture a SBR through my Texas LLC that I use for investments. If the regs go through as above, I will pay the $200 tax to transfer the SBR back to me personally.

[Dutchster]

The only thing that bothers me about the notification aspect is what about public records laws? In many states if you write a letter to an elected official like a sheriff it becomes a public record. Unless state law provides an exception for Form 1s/4s sent under this new rule everyone's supposedly confidential tax forms will be out there in the public record.

The ATF justifies this breach of taxpayer privacy by saying that since it's not the ATF sending the form to the CLEO but rather the transferee it's all legit. Perhaps, but that also means that the person receiving that form is under no obligation to protect it, and indeed may have an affirmative duty to retain it for public inspection.

[PBR]

The CLEO "signoff" on the background check was supposedly eliminated (changed to NOTIFICATION) in the final version because of the burden it would place on CLEO's for all the "responsible persons" in trusts/legal entities.

The change does add a new burden to trusts/legal entities that was not there before. Now the "responsible persons" of an entity have to be printed/photoed and have ATF conduct the background check. But really that was not the reason people were creating trusts (to get out of background check). It's always been a felony for a prohibited person acting for the entity to take physical possession. The trusts were used to bypass the CLEO's who would not sign the certifications even though they were allowed by state law. I have 3 NFA items in my name, and then the new Sheriff wouldn't sign, so I applied to manufacture a SBR through my Texas LLC that I use for investments. If the regs go through as above, I will pay the $200 tax to transfer the SBR back to me personally.

Ok so now you just have to notify local CLEO you have an NFA item no need for them to sign off anything? My local CLEO will not sign off anything either so I was in the process of possibly forming a Trust but maybe from the looks of it now I will hold off. But this is still 6 months off from happening though correct?

[ScottDLS]

The CLEO "signoff" on the background check was supposedly eliminated (changed to NOTIFICATION) in the final version because of the burden it would place on CLEO's for all the "responsible persons" in trusts/legal entities.

The change does add a new burden to trusts/legal entities that was not there before. Now the "responsible persons" of an entity have to be printed/photoed and have ATF conduct the background check. But really that was not the reason people were creating trusts (to get out of background check). It's always been a felony for a prohibited person acting for the entity to take physical possession. The trusts were used to bypass the CLEO's who would not sign the certifications even though they were allowed by state law. I have 3 NFA items in my name, and then the new Sheriff wouldn't sign, so I applied to manufacture a SBR through my Texas LLC that I use for investments. If the regs go through as above, I will pay the $200 tax to transfer the SBR back to me personally.

Ok so now you just have to notify local CLEO you have an NFA item no need for them to sign off anything? My local CLEO will not sign off anything either so I was in the process of possibly forming a Trust but maybe from the looks of it now I will hold off. But this is still 6 months off from happening though correct?

Yes this is 6 months from when they post the final rule in the Federal register, presumably in the next couple weeks. I just did a form 1 to my LLC for SBR, because I didn't want to wait, and I didn't know this CLEO notification thing was coming. Also, if you're thinking of getting a machinegun, be prepared to pay through the nose. The cheapest MAC's are $5000+ and full auto rifles like M16's are in the $10,000's.

[PBR]

Yes this is 6 months from when they post the final rule in the Federal register, presumably in the next couple weeks. I just did a form 1 to my LLC for SBR, because I didn't want to wait, and I didn't know this CLEO notification thing was coming. Also, if you're thinking of getting a machinegun, be prepared to pay through the nose. The cheapest MAC's are $5000+ and full auto rifles like M16's are in the $10,000's.

Heck I will never be able to get a fully auto unless I hit the lotto, I couldn't even afford the Trust but sold a pistol to get the extra cash to do it but am holding off for now.

[denwego]

I can see the reaction to the great non-trust-having crowds now...

[CleverNickname]

Now all we need is a law that requires any Texas CLEO to not keep any copies of ATF forms that they receive, or record any information from them.

[NorthTexas]

The only thing that bothers me about the notification aspect is what about public records laws? In many states if you write a letter to an elected official like a sheriff it becomes a public record. Unless state law provides an exception for Form 1s/4s sent under this new rule everyone's supposedly confidential tax forms will be out there in the public record.

The ATF justifies this breach of taxpayer privacy by saying that since it's not the ATF sending the form to the CLEO but rather the transferee it's all legit. Perhaps, but that also means that the person receiving that form is under no obligation to protect it, and indeed may have an affirmative duty to retain it for public inspection.

Very good point that I haven't seen given much attention yet. I spoke with an attorney today who specializes in Texas gun trusts and asked about this specifically. She hasn't given it much thought or done any research on this, but thought it likely that the form copies sent to CLEOs as notification would become public records which could be requested under Texas public information laws. Remembering how reporters in New York several years ago created an online map of gun owners living in NY, I would NOT want this information available to the press or anyone else.

I did read up a bit on Texas' public information laws on the AG website. I think we would either need an AG decision to protect these forms, or possibly legislative action. From what I found, the problem with the AG route is that I'm not sure we as individuals could request such an AG decision. It appears that the CLEO would have to recognize a potential privacy problem upon receiving a public information request, then choose to request a decision from the AG rather than just handing over the records. Once a decision is made by the AG, it would apply state-wide, but who knows how many CLEOs might simply release records instead of going to the trouble of requesting a decision from the AG (especially if that particular CLEO doesn't like Title II weapons in civilian hands anyway).

I've been on the fence about getting into Title II stuff for a while, but this is lighting a fire under me.

[CleverNickname]

Now we won't need a CLEO signoff bill, but I'd love to see a bill in the TX legislature that requires any Texas CLEO to destroy any NFA forms received within 24 hours.

The ATF can require we send the forms to a CLEO, but the state can require that the CLEO not keep that info.

[ScottDLS]

Now we won't need a CLEO signoff bill, but I'd love to see a bill in the TX legislature that requires any Texas CLEO to destroy any NFA forms received within 24 hours.

The ATF can require we send the forms to a CLEO, but the state can require that the CLEO not keep that info.

Do you have any idea what they did with them previously? I seem to remember the Denton County Sheriff made copies of mine that I did in 2002 and 2004...

I mean the whole point of the NFA is that the Feds have a national "REGISTRY" and they have your prints, pics, and details. I suppose that was theoretically on of the reasons people did corps and trusts to register...NOT JUST BECAUSE CLEO WOULDN'T SIGN

[CleverNickname]

I don't know what they did with the copies; I imagine agency policy would vary.