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Understanding 41P / 41F

John Pierce

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The other shoe has finally dropped …

As many have been predicting since the action date was moved to January last month, yesterday the Attorney General signed a final version of 41P (now known as 41F).

The final rule, which will go into effect 180 days after it has been published in the Federal Register, differs quite a bit from the proposed rule. Let’s look at some of the immediate questions that need to be answered:

When will 41F take effect?

The rule is set to take effect 180 days after it is published in the Federal Register. The American Suppressor Association is reporting that this will be ‘on or near‘ July 2nd, 2016 which implies that the final rule was published in the Federal Register yesterday (January 4, 2016).

As of this morning, browsing the Federal Register for yesterday’s date fails to yield a result for 41F but interestingly enough, when you search for the Regulation Identifier Number (RIN) of the rule (1140-AA43) you get the following:

FR_41F_Search

If I didn’t know better, I would think that they are playing fast and loose with the publication requirements of the Administrative Procedure Act. But nonetheless, we are almost certainly looking at the first week of July for 41F to take effect and you should plan accordingly.

Will it definitely take effect?

This is another popular question. There were any number of ‘irregularities’ that various attorneys and advocacy groups pointed out when 41P was first published. Based upon these potential violations of various federal laws governing administrative rulemaking, a number of legal challenges have been suggested.

The most prevalent of these that I am aware of is being planned by the Firearms Industry Consulting Group. I highly recommend supporting their efforts in this regard.

However, I would advise my clients to proceed under the assumption that it WILL take effect the first week of July and plan accordingly.

Will trusts now be subject to the CLEO signoff requirement?

This was one of the areas where 41F diverges from what was proposed in 41P. Your comments on 41P made a huge difference!

Trusts, corporations, and other non-individual applicants will now be subject to the same CLEO requirements as individual applicants … however … the requirements have been changed from requiring CLEO sign-off to only requiring CLEO notification.

What is the difference? It means that your CLEO can be as anti-gun as they wish but they can no longer deny your Form 1 or Form 4 because they do not have to sign-off on it. You will simply notify them (on a form to be prescribed by the ATF) and that will satisfy the requirement. They can no longer ban you by refusing to sign.

One additional fact to note is that the notification requirement will apply not only to the grantor of the trust but to all ‘responsible persons’ of the trust.

Who do they consider a ‘responsible person’?

The rule defines a ‘responsible person’ as “those persons who have the power and authority to direct the management and policies of the trust or legal entity to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the trust or entity.”

In the case of the trusts I provide to my clients, those would be the joint trustees listed on Schedule B.

Will trusts also be subject to the fingerprinting and photograph requirements?

Yes. But even here there is a beneficial change between 41P and 41F (due largely I suspect to the ATF’s own staffing limitations rather than to a consideration for applicants).

When a trust applicant submits their first application after the rule takes effect, all ‘responsible persons’ will have to submit fingerprints and photographs. However, going forward from there, if your trust has had a Form 1 or Form 4 approved within the previous 24 months and there has been no change in the trust or the list of ‘responsible persons’ then you are not required to resubmit fingerprints or photographs.

Will this affect my existing tax stamps?

No. The rule will only apply to applications made after the rule goes into effect. Existing tax stamps and applications that go pending before the rule goes into effect will not be impacted.

Where do we go from here?

I wanted to get an article out this morning summarizing 41F and answering the most immediate questions. I will follow up over the next few hours and days with additional updates about such topics as:

Will trusts still be the preferred vehicle for NFA ownership? (Spoiler Alert … the answer is ‘Yes’)
What changes should I make to my trust before July?
What does this mean for eForms?

If you think of other questions you would like answered, please use the contact form on the right hand side of the page to contact me.

For more details (including the links and screen captures), visit my law practice website.
_________________________
----------------------------
John Pierce, Esq.
www.JohnPierceEsq.com
(276) 206-9615
----------------------------
 

davidmcbeth

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What's clearly outrageous is the fact that laws can be changed just by a posting in the federal register (something blessed by SCOTUS a while back).

Now one is required to read this everyday to keep up on changes on the law that can directly affect oneself.

Its an impossible task...the government has made it so that even if you wanted to follow laws its impossible to do so.

And this thread is right on point in that, here, we have a skilled attorney who cannot find the law. What hopes do we non-skilled folks have. Zero.

Laws are not laws at all anymore, they are traps just waiting for an unsuspecting person to fall into.

The solution is simple: just refuse to convict anyone of any crime until the way laws are made are changed. Anyone - any crime. Do you think that the laws you can find have been produced honorably? Think again.
 

nonameisgood

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Yes, but then again, they do have to publish a notice of proposed rule making and evaluate comments received. These are technically implementations of law in the form of regulation.


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JoeSparky

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It seems per my quick read of the rule making summary that in the case of death and inheritance the transfer of the NFA item to the inheritor will be done on a TAX EXEMPT status. Does this actually mean that if "Dad1" lawfully has an NFA firearm/device and specifies that upon his death in his will or estate settlement that these items are to be inherited by "Recipient1, 2, 3, ect" the new owners DO NOT have to apply for or receive a new TAX STAMP for these Items?
 

MAC702

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It seems per my quick read of the rule making summary that in the case of death and inheritance the transfer of the NFA item to the inheritor will be done on a TAX EXEMPT status. Does this actually mean that if "Dad1" lawfully has an NFA firearm/device and specifies that upon his death in his will or estate settlement that these items are to be inherited by "Recipient1, 2, 3, ect" the new owners DO NOT have to apply for or receive a new TAX STAMP for these Items?
IIRC, and if I'm reading your question correctly, no, there is a time frame involved, and the heirs must submit a Form 4 and receive a new stamp, but the $200 is waived.
 

JoeSparky

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IIRC, and if I'm reading your question correctly, no, there is a time frame involved, and the heirs must submit a Form 4 and receive a new stamp, but the $200 is waived.
Actually, per my read part of the 280 page pdf of this.... from section III(F) Form 5 must be completed and approved before taking possession/ownership. Rational is the death of the previous stamp holder necessitated the transfer--- the deceased can't legally possess or own, so it is an INVOLUNTARY Transfer. As such, provided the new recipient is a "legal heir" only needs to submit fingerprint cards and pass the background check, but does not have to purchase a new tax stamp! Now, transferring the same item to someone other than a "named" heir would not be an involuntary transfer and then would require the full form 4 and the issuance of a new tax stamp!
 

ixtow

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If CLEO involvement has been changed from "sign off" to "notify," and all applicants now hove to do fingerprints and photos anyway; why not just do it personally and skip the corp/trust stuff?
 

ixtow

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It seems per my quick read of the rule making summary that in the case of death and inheritance the transfer of the NFA item to the inheritor will be done on a TAX EXEMPT status. Does this actually mean that if "Dad1" lawfully has an NFA firearm/device and specifies that upon his death in his will or estate settlement that these items are to be inherited by "Recipient1, 2, 3, ect" the new owners DO NOT have to apply for or receive a new TAX STAMP for these Items?
I wonder if this same route applies to dissolving a corporation that currently is the holder of NFA items?

Dissolving a legal entity is kinda like dying...
 

protias

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If CLEO involvement has been changed from "sign off" to "notify," and all applicants now hove to do fingerprints and photos anyway; why not just do it personally and skip the corp/trust stuff?
When you die, who will get your stuff? The trust also helps if you are at the range and nature starts to call. Technically, you can't leave your stuff with the person you came with.
 

MSG Laigaie

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Actually, per my read part of the 280 page pdf of this.... from section III(F) Form 5 must be completed and approved before taking possession/ownership. Rational is the death of the previous stamp holder necessitated the transfer--- the deceased can't legally possess or own, so it is an INVOLUNTARY Transfer. As such, provided the new recipient is a "legal heir" only needs to submit fingerprint cards and pass the background check, but does not have to purchase a new tax stamp! Now, transferring the same item to someone other than a "named" heir would not be an involuntary transfer and then would require the full form 4 and the issuance of a new tax stamp!
I have been concerned as to where all my weapons will go when I "move on". I am "in the process" of a pretty little suppressor and it will be my first Stamp. From what I read, and I am no "Mike", I must list, by name, who gets what gun to avoid another stamp. Can I keep this document to myself or do I have to file it with some .gov to show my intent?
 

nonameisgood

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If you haven't actually filed the forms yet, buy it as a trust. Name an heir as a successor trustee and the Class III items stay in the trust. The trustee can then assign other trustees and successor trustees for eternity. No additional forms except as required by the new rules for trustees. And no new taxes with each passing.
As an added advantage, you can alway name additional trustees if you want them to be able to use your Class III items when you aren't around.


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BB62

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The other shoe has finally dropped …

As many have been predicting since the action date was moved to January last month, yesterday the Attorney General signed a final version of 41P (now known as 41F). ...
Is there any advantage to creating a trust now, rather than waiting for the rule to be implemented/litigated?
 

nonameisgood

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Yes. As I understand it, you can get items into the trust without fingerprints and all that jazz if they are in process prior to the implementation date.

My E-form just came back from January. Four months vs about four weeks last year.


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nonameisgood

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BANG!! That trigger has already been pulled. I will do better next time, this is my first shot at a suppressor.
You cannot transfer that item to the trust unless you again file and pay $200... So be sure you have a plan for your demise. IANAL, but forming a trust and assigning another firearm to the trust now, and willing this silencer to the trust might do it. Be sure your co-trustee(s) are eligible.
 

ixtow

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Yes. As I understand it, you can get items into the trust without fingerprints and all that jazz if they are in process prior to the implementation date.

My E-form just came back from January. Four months vs about four weeks last year.


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I don't see this as a concern... I had to put up with worse to get my CWP...

Feds already have your fingerprints, and your face is on 100 security cameras a day.... This might have been a valid concern 80 years ago. But since that territory has already been long surrendered, it's kinda silly to make a fuss about it.
 

nonameisgood

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For me, a trust was the only route because local CLEOs would not sign. People would tell me that there was a certain judge but would never say who it was (and it's a big city, so knocking on doors was kind of impractical if there was a better way.)
It also seems obvious to me that the new rules will slow the paperwork way down.


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MSG Laigaie

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My F-1 passed and the can went to my FFL. I picked up the form-4 today and will be getting printed on thursday, the 14th. One day after the "new rules" go into effect. fun, much fun
 

nonameisgood

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My F-1 passed and the can went to my FFL. I picked up the form-4 today and will be getting printed on thursday, the 14th. One day after the "new rules" go into effect. fun, much fun
Congrats!

On a side note, Dallas PD Chief Brown will now be out of the loop for CLEO signatures but my fellow Dallasites may need to expect whatever interference he can conjure up to prevent the approvals and transfers.
 
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