ATF FFL audit rules?

Ryanxia · Aug 16, 2013

I'm looking to find some source information on what the laws are during an ATF audit of an FFL?
EDIT: My term of audit = compliance inspection.

Also looking for source information (or to be pointed in the right direction) on whether an FFL must allow an ATF agent to look through his books ALONE without the presence of the owner or even local PD, during an audit or investigation. (I believe the answer to be no but looking to back it up).

Lastly, if there is any appeal procedure to an administrative warrant on an FFL?

I know these are specific questions, I've done some looking around but hoping my THR buddies can come through. I've pulled up a few sites from the sticky threads in the legal section and am going to start looking through the walls of text.

Thanks in advance for any help. This is of course purely hypothetical..

dogtown tom · Aug 16, 2013

Ryanxia I'm looking to find some source information on what the laws are during an ATF audit of an FFL?

What exactly do you mean by "audit"?
ATF is limited by Federal law to no more than one compliance inspection per year. A compliance inspection is limited to the dealers bound book, 4473's, Multiple Sale forms, and firearm inventory.

Any examination of the dealers records beyond a compliance inspection is limited to criminal investigations.........either a firearm trace (typically done by the dealer) or a criminal investigation of the dealer himself.

Also looking for source information (or to be pointed in the right direction) on whether an FFL must allow an ATF agent to look through his books ALONE without the presence of the owner or even local PD, during an audit or investigation.

During a compliance inspection the IOI will usually request the dealers presence to answer any questions or to assist.

In a criminal investigation I seriously doubt that any law enforcement agency would allow the subject to sit side by side with agents while they collect evidence or review files.

If the dealer is not the subject of the investigation, I see no reason why he would not be allowed on his own business premises. I believe ATF would be skewered pretty good if they wouldn't let me in my own house while they are oggling my books.

Lastly, if there is any appeal procedure to an administrative warrant on an FFL?

Not sure what you mean by this.

A search warrant is issued during a criminal investigation to uncover evidence of a crime. Once signed by a judge its valid.
An appeal is filed when you get an unfavorable ruling, administrative penalty or conviction.You don't appeal a search warrant, you appeal the judgement, conviction or penalty.

ATF has to follow due process and there are procedures to follow when they spank the dealer for errors or ommissions in his records.

Ryanxia · Aug 16, 2013

Thanks for your reply Tom. Let me clear a few things up.

When I said audit I mean compliance inspection. Basically looking for rules on what they are allowed to ask for, can they photocopy/photograph forms/books during an inspection? Can they go back further than a year (I know the FFL has to keep records for 20 years).

During the IOI compliance check/investigation I'm referring to the legality of the IOI asking the FFL owner to leave while he goes through the records.

Also, when I used the term investigation I'm referring to a regular investigation of a customer, not the FFL.

The administrative warrant is something I was told is gotten to dig further into FFL records then is generally legal. To my knowledge during a compliance check the IOI is only allowed to go back one year.

dogtown tom · Aug 16, 2013

Ryanxia ...When I said audit I mean compliance inspection. Basically looking for rules on what they are allowed to ask for, can they photocopy/photograph forms/books during an inspection?

Yes, the IOI will usually have a portable copier/scanner. ATF regs prohibit the IOI from removing 4473's, bound books etc UNLESS he has a warrant to do so. Just about the only time this would happen is when they are actively engaged in a criminal trace and need to preserve evidence. They will give you a receipt for any records removed. This would be highly unusual except in a high profile case.

Can they go back further than a year (I know the FFL has to keep records for 20 years).

Yes they can. But typically they will go no furthur than the date of your previous inspection.

During the IOI compliance check/investigation I'm referring to the legality of the IOI asking the FFL owner to leave while he goes through the records.

It's YOUR business premises...........it doesn't shut down because ATF is conducting a compliance inspection. If the IOI asks you to leave, ask for his supervisors name and phone #.

Also, when I used the term investigation I'm referring to a regular investigation of a customer, not the FFL.

Criminal investigation of a customer (as opposed to a compliance inspection) is wholly different............you may be asked to leave the room, stand in the corner or butt out, but they cannot ask you to leave your licensed premises.

The administrative warrant is something I was told is gotten to dig further into FFL records then is generally legal. To my knowledge during a compliance check the IOI is only allowed to go back one year.

A compliance inspection can review any of your records for any length of time. I've never heard any dealer mention a "one year rule" and have never found such limitation in any ATF regulation.

Ryanxia · Aug 16, 2013

Thanks again Tom for the input. I am however looking for source material. Actual link to laws confirming or denying what you said. I believe a few items to be different but that's why I'm asking. Looking for the actual written laws. The ATF like any other alphabet agency still has its boundaries and I'd like to know exactly what they are. Specifically where it states that they can or cannot copy records (scanner/camera, which is making copies) and if they are within their right to make the FFL leave the room.

The reason I ask is hypothetically some IOI's try to overstep their bounds quite often and there are plenty of situations where an FFL has pointed out they cannot do what they claim they can and they concede.

The other reason is the hypothetical situation of the compliance inspection AND customer investigations is because of the event where an IOI might try to confuse the FFL that this is a combination of inspection/vague investigation.

dogtown tom · Aug 16, 2013

Source? How about ATF?

http://www.atf.gov/content/library?qt-library_tabs=2

More specifically, read CFR 478 http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&SID=447a3002cd8fe279c52e06185d078716&tpl=/ecfrbrowse/Title27/27cfr478_main_02.tpl

I can't point you to a law or regulation that doesn't exist.
If there is no law or ATF regulation that says ATF cannot copy records.........then guess what..............they can copy records. Since there IS a law that says the IOI cannot remove records, the IOI's were issued portable scanner/copiers.

In regards to asking you to leave while they inspect your records, again, there is no law or ATF regulation that mentions anything of the sort. While no regulation or law prohibits you from being in the room or on your premises, I'm quite sure that interfering with the inspection will cause the IOI to walk out. He'll come back with a search warrant and seize your records.

Why are you worried they will ask you to leave your premises? I've talked to dozens of dealers and never has any of them been asked to leave.

The reason I ask is hypothetically some IOI's try to overstep their bounds quite often and there are plenty of situations where an FFL has pointed out they cannot do what they claim they can and they concede.

Again, if you feel the IOI is out of bounds........call his supervisor.

The other reason is the hypothetical situation of the compliance inspection AND customer investigations is because of the event where an IOI might try to confuse the FFL that this is a combination of inspection/vague investigation.

It won't be confusing because you'll never know if he's interested in a particular customer and it will be none of your business if he is.

You seem to be confused with compliance inspection vs criminal investigation. While an inspection might lead into an investigation..............they aren't done at the same tme or by the same ATF employee. Industry Operations Investigators do compliance inspections. They don't carry guns or handcuffs and don't arrest people. Special Agents conduct criminal investigations and do carry guns and do arrest people. Special Agents do not get involved in compliance inspections unless an IOI (beancounter) tells them there are criminal violations of Federal firearms law.
If you have a Special Agent looking at your books call your lawyer. :uhoh:

In any event 478.23 is the section that permits ATF to conduct inspections and investigations.

§ 478.23 Right of entry and examination.

(a) Except as provided in paragraph (b), any ATF officer, when there is reasonable cause to believe a violation of the Act has occurred and that evidence of the violation may be found on the premises of any licensed manufacturer, licensed importer, licensed dealer, or licensed collector, may, upon demonstrating such cause before a Federal magistrate and obtaining from the magistrate a warrant authorizing entry, enter during business hours (or, in the case of a licensed collector, the hours of operation) the premises, including places of storage, of any such licensee for the purpose of inspecting or examining:

(1) Any records or documents required to be kept by such licensee under this part and

(2) Any inventory of firearms or ammunition kept or stored by any licensed manufacturer, licensed importer, or licensed dealer at such premises or any firearms curios or relics or ammunition kept or stored by any licensed collector at such premises.

(b) Any ATF officer, without having reasonable cause to believe a violation of the Act has occurred or that evidence of the violation may be found and without demonstrating such cause before a Federal magistrate or obtaining from the magistrate a warrant authorizing entry, may enter during business hours the premises, including places of storage, of any licensed manufacturer, licensed importer, or licensed dealer for the purpose of inspecting or examining the records, documents, ammunition and firearms referred to in paragraph (a) of this section:

(1) In the course of a reasonable inquiry during the course of a criminal investigation of a person or persons other than the licensee,

(2) For insuring compliance with the recordkeeping requirements of this part:

(i) Not more than once during any 12-month period, or

(ii) At any time with respect to records relating to a firearm involved in a criminal investigation that is traced to the licensee, or

(3) When such inspection or examination may be required for determining the disposition of one or more particular firearms in the course of a bona fide criminal investigation.

(c) Any ATF officer, without having reasonable cause to believe a violation of the Act has occurred or that evidence of the violation may be found and without demonstrating such cause before a Federal magistrate or obtaining from the magistrate a warrant authorizing entry, may enter during hours of operation the premises, including places of storage, of any licensed collector for the purpose of inspecting or examining the records, documents, firearms, and ammunition referred to in paragraph (a) of this section (1) for ensuring compliance with the recordkeeping requirements of this part not more than once during any 12-month period or (2) when such inspection or examination may be required for determining the disposition of one or more particular firearms in the course of a bona fide criminal investigation. At the election of the licensed collector, the annual inspection permitted by this paragraph shall be performed at the ATF office responsible for conducting such inspection in closest proximity to the collectors premises.

(d) The inspections and examinations provided by this section do not authorize an ATF officer to seize any records or documents other than those records or documents constituting material evidence of a violation of law. If an ATF officer seizes such records or documents, copies shall be provided the licensee within a reasonable time.

[T.D. ATF-270, 53 FR 10492, Mar. 31, 1988; as amended by T.D. ATF-363, 60 FR 17450, Apr. 6, 1995]

Ryanxia · Aug 16, 2013

EDIT: Just reread your first statement in your last post. Thanks for the advise.

I appreciate your last example of the confusion on what constitutes an inspection or a customer investigation because in my hypothetical example the IOI is also claiming to conduct a customer investigation at the same time of the inspection.

You've been very helpful but do you happen to know of any source on that statement that a customer investigation cannot be conducted by an IOI?

Ryanxia · Aug 16, 2013

Also, in this hypothetical situation the FFL was asked to leave while the IOI was given free reign of all records to copy/remove/do with as he pleases.

theautobahn · Aug 16, 2013

I'm just spitballing here to see what sticks, so don't beat me up too badly...

This is a little vague, but 478.23 says...

(d) The inspections and examinations provided by this section do not authorize an ATF officer to seize any records or documents other than those records or documents constituting material evidence of a violation of law. If an ATF officer seizes such records or documents, copies shall be provided the licensee within a reasonable time.

Does "seize" refer to the physical taking of a 4473 or could it refer to copies, scans, etc. of said form?

And this is a stretch, but MIGHT it be inferred from the "material evidence of a violation of law" portion that they are only allowed to take / make record (scans, copies, etc.) of forms that are either filled out incorrectly (illegally) or part of a criminal investigation (in which case it would not involve an IOI anyway).

Ryanxia · Aug 16, 2013

Thanks autobahn. That's the kind of referencing I'm looking for. (Even if it does cause more of a headache lol)

dogtown tom · Aug 17, 2013

Ryanxia....You've been very helpful but do you happen to know of any source on that statement that a customer investigation cannot be conducted by an IOI?

Well, again my source is ATF. Start on their home page and click on "Careers"......that will explain the various job duties in ATF.

I would imagine a significant number of criminal investigations of customers began with an IOI seeing something odd in a dealers books or 4473's. They would also assist criminal investigations by performing traces.
Their job description is pretty clear:

Conducting investigations and inspections designed to carry out the Federal government's regulatory responsibilities pertaining to the firearms and explosives industries. Identifying evidence of falsification of records, inventories and document discrepancies through the analysis and examination of records, documents, and reports. Referring violations to special agents for further action.

Ryanxia Also, in this hypothetical situation the FFL was asked to leave while the IOI was given free reign of all records to copy/remove/do with as he pleases.

Enough with the hypothetical BS please. If it isn't you being inspected you don't have first hand knowledge and aren't likely getting the whole story. That said, an ATF IOI could ask the dealer to stand on his head in the corner.......doesn't mean the dealer has to do it. In you hypothetical you say the IOI was free to "copy/remove/do with as he pleases".....that simply isn't true. ATF regs and Federal law is clear.....he cannot remove records at will. See the last paragraph of 478.23

theautobahn Does "seize" refer to the physical taking of a 4473 or could it refer to copies, scans, etc. of said form?

Again, this is why the IOI is issued a copier! Making copies isn't "seizing" anything.:banghead:

Ryanxia · Aug 17, 2013

Enough with the hypothetical BS please. If it isn't you being inspected you don't have first hand knowledge and aren't likely getting the whole story. That said, an ATF IOI could ask the dealer to stand on his head in the corner.......doesn't mean the dealer has to do it. In you hypothetical you say the IOI was free to "copy/remove/do with as he pleases".....that simply isn't true. ATF regs and Federal law is clear.....he cannot remove records at will. See the last paragraph of 478.23

I will continue my hypothetical questions. Like you said, the IOI could ask the dealer to stand on his head, doesn't mean he has to do it.. Where can I see what he has to do and what he doesn't? Because without citing actual laws it's all hearsay. If you just want to offer opinion I still thank you but I'm looking for the actual current laws.

dogtown tom · Aug 17, 2013

If you just want to offer opinion I still thank you but I'm looking for the actual current laws.

No, you just want to engage in mental masturbation in a hypothetical sense.

I've posted the link to the ATF Library where you can find every Federal law related to firearms. I also posted a link to CFR 478 Commerce in Firearms and Ammunition where you can read regulations that apply to dealers.

Knock yourself out sunshine.

Ryanxia · Aug 17, 2013

dogtown tom said:
No, you just want to engage in mental masturbation in a hypothetical sense.

I've posted the link to the ATF Library where you can find every Federal law related to firearms. I also posted a link to CFR 478 Commerce in Firearms and Ammunition where you can read regulations that apply to dealers.

Knock yourself out sunshine.

You edited one of your posts to add those links, my apologies I did not see them. I will certainly read them. Thanks again.

EDIT: Also please don't be inappropriate, I'm not engaging in 'mental masturbation' I just chose to treat this as a hypothetical situation. If you disapprove that's your choice. Thank you again for your input.

theautobahn · Aug 18, 2013

Let's start over...

Gentlemen, gentlemen... we're all on the same side here.

With some more information on the situation gained after the posts above, I think the question should be...

If the FBI is not legally allowed to record SN's and other firearms information during the NICS check because it would constitute a "registry", how is the ATF scanning 4473's or A&D pages any different than the FBI taking the information during the NICS check?

And as far as making copies of records, when you read section C along with section D of 478.23, I would say that copies are not allowed.

Section C relates to IO investigations and says that an IOI is allowed once per year "...for the purpose of inspecting or examining the records, documents...". It doesn't say anything about copying or scanning.

Section D relates specifically to seizing records or documents that are proof of violations of law, not seizing anything during the course of a normal IO investigation.

dogtown tom · Aug 18, 2013

theautobahn ...If the FBI is not legally allowed to record SN's and other firearms information during the NICS check because it would constitute a "registry", how is the ATF scanning 4473's or A&D pages any different than the FBI taking the information during the NICS check?

Because Federal law specifically prohibits the FBI from keeping records of approved transactions beyond the end of the NICS business day.
There is no Federal law prohibiting ATF from copying 4473's.

And as far as making copies of records, when you read section C along with section D of 478.23, I would say that copies are not allowed.

Really?

Based on what?
Nothing in either of those says anything about making copies.

Section C relates to IO investigations and says that an IOI is allowed once per year "...for the purpose of inspecting or examining the records, documents...". It doesn't say anything about copying or scanning.

Exactly. It also does not say the IOI cannot make copies.

Section D relates specifically to seizing records or documents that are proof of violations of law, not seizing anything during the course of a normal IO investigation.

If you think making copies is the same as seizing records you need to read a dictionary.

theautobahn · Aug 18, 2013

If you think making copies is the same as seizing records you need to read a dictionary.

Jeez, I'm usually the one making snarky, sarcastic comments (although usually not in such an instigating way).

Generally, laws are written to PROHIBIT acts. However, some laws (as above), are written to provide a course of action or state what IS allowed.

Section C states that the ATF "MAY" do one IOI per year "for the purpose of inspecting or examining the records, documents, firearms, and ammunition..."

If you think "inspecting or examining" is the same as "copying or scanning", then I would submit that you keep your dictionary as you need it more than I do.

dogtown tom · Aug 18, 2013

theautobahn ....If you think "inspecting or examining" is the same as "copying or scanning", then I would submit that you keep your dictionary as you need it more than I do.

I never made such a statement , nor did I try and link the two.

If you had any idea of Federal firearms law or ATF regulations you would understand why an IOI would tote around a copier.

theautobahn · Aug 18, 2013

If you had any idea of Federal firearms law or ATF regulations you would understand why an IOI would tote around a copier.

This whole thread is about confirming that the investigator performing an IO is allowed to copy / scan 4473's and/or A&D's. So I would submit that if YOU had any idea of "Federal firearms law or ATF regulations in relation to an IO investigator toting around a copier" (paraphrased), this thread would have been much, much shorter. But I have yet to see where you cited which law or regulation allows them to make copies of said documents, which would basically be creating a gun registry.

Geez, the FBI isn't allowed to keep records, so let's try to create a loophole in which the ATF can create records during their IOI's. And it blows my mind how many FFL's roll over for this. :banghead:

Frank Ettin · Aug 18, 2013

Quite enough bickering.

The OP's friend has really life questions. For an authoritative answer he should consult a qualified lawyer or put his questions in writing to the ATF.

ATF FFL audit rules?

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