I was at my local class 3 last weekend looking to add to my trust and the owner told me of something that I found concerning. He said that the ATF is looking to change the requirement's for obtaining new items to your trust. Specifically he said that they are trying to pass law that would require you to get CLEO sign off and fingerprints and pictures for everyone on the trust.
Yep. It's a proposed regulation, referred to as 41-P. (It's not a statute, which would have to be passed by Congress, but an administrative regulation, which is promulgated by the agency itself, the ATF.) They aren't "outlawing trusts" or anything as dire as some folks have heard. Basically, what you heard is accurate: they would require trusts to submit the same things individuals do: photographs, fingerprints and CLEO signoff. Except for trusts, it would be for all "responsible persons," which would basically be anyone who can possess the trust's firearms. (So not, presumably, the beneficiaries, but the grantor and trustees.)
Is there any truth to this and will what we have now be grandfathered in? What if I never add to the trust again? Will I still have to go through those channels?
What folks usually mean when they ask about "grandfathering" is confusing. Your follow-up questions get more to the point.
The ATF regulates the
transfer of NFA firearms, so when you apply for a tax stamp, they control that process. They could not go back and pull old transfers and require you to submit more documentation for stamps they already approved. Once it's approved, they can't do anything retroactively. (There's complicated legal doctrines that explain why, but it's not important.)
So if you never add to the trust again, the new rules would not apply to you and you would not have to go through that process.
However, sometimes when people ask about grandfathering, they're operating under the assumption that once the ATF has seen their trust once, it's somehow been "recognized" and maybe the new rules wouldn't apply because they already had their trust approved by the ATF. It doesn't work like that. The ATF doesn't keep your trust on file or "approve" the trust. They approve transfers. To trusts. To individuals. To corporations. Once the tax stamp is issued, that's it. Each new tax stamp is a new process, and the new regulations would apply to new instances of the process.
One last sense of "grandfathering" that gets asked about is the "what if I have a tax stamp application already submitted, but not yet approved?" situation. To be honest, no one can say for sure what the ATF will do with those. Could they apply the new regulations immediately, reject all those applications (or send deficiency notices) and make people start all over? Yes. They could. Will they? The learned consensus among the people familiar with these thing says probably not. They would be creating a paperwork nightmare for themselves. TONS of notices and rejections and refunds of taxes would have to go out. Then all the backlog they had cleared up would be re-created overnight as their work ground to a halt, and then 30,000 applications would come back in anew overnight. So they would probably set an effective date instead, and say, "Any applications received after this date must comply with the new rules." But again, no one knows.
If this is true, is this the first step in the ATF making it harder to obtain these fun items for law abiding citizens? Could this just be another attack on our 2A?
That speculation is, as they say, above my pay grade. I'm sure someone high in the ATF or the administration thought the process for trusts seemed too easy. But to do anything more drastic, they would have to get Congress to act, so this is probably as bad as it gets from an administrative law changes standpoint.
What is the chance of this actually happening? What other changes are they looking to make?
No one knows. Those are the only proposed changes that have been made public and gone through the public comment period required by law. They could have any number of other things up their sleeves.
The chances of it actually happening? Also unknown. They're not zero, since they did go through part of the process already. But the comments against it overwhelmed them, and they keep delaying and putting off implementation. While at the same time spending money to beef up eForms (which can't handle trusts if they require fingerprints and photographs), so maybe it won't happen. That's our hope. But at the very least, the consensus seems to be that the May deadline isn't happening and they're probably delayed at least another 6 months again.
Aaron
