ATF Rule 41F Compliance
On July 13, 2016, ATF Rule 41F (formerly 41P) will take effect. Many significant changes to possession of National Firearms Act (NFA) items have occurred. These changes affect both trusts and individual owners of NFA items.
This will explain the changes and tips to comply with the new Rule
Elimination of Chief Law Enforcement Officer (CLEO) SignoffRule 41F eliminates the requirement that an individual owner of an NFA item had to seek a signature from the CLEO of his area attesting to the lawful purpose of the item and the applicant's legal status to own the item. When it becomes effective in July, Rule 41F only states that a Form 1, 4, or 5 (whichever is applicable) or the newly crated Form 23 (Responsible Persons) must only be sent to the CLEO as a notification only. While the ATF will likely expound upon what constitutes proper notification in the future, it may be advisable to include a cover letter as well. An additional concern is that there may be a conflict between state records laws and the confidential nature of NFA forms as a Form 1, 4, and 5 are tax documents. At this time, the ATF believes that the information contained on a Form 1, 4, or 5 is the type of information that is not protected by Federal tax law since it is being voluntarily provided to local law enforcement.
Creation of "Responsible Persons"The creation of "Responsible Persons" in Rule 41F has caused concern amongst many NFA trusts, but that concern is somewhat overstated. A "Responsible Person" is defined 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." While this seems like a list that encompasses everyone on a trust or an LLC, it only affects those parties that currently have the ability or power do do any of the things listed. If a party to a trust or LLC has powers that are not yet effective, such as Successor Trustees or Successor Officers they are not a responsible person.
Fingerprinting and Picture Submission for Responsible PersonsAlong with defining what constitutes a Responsible Person, the ATF will now require all Responsible Persons to submit a 2"x2" photograph and a Fingerprint Identification Card (FD-258) along with their Form 23. Based upon the initial drafts of the Form 23 that have been published, the Form 23 looks very similar to a Form 4473, with some additional spaces. The submission of this material is only required for Responsible Persons that are in existence at the time the Form 1 or 4 is submitted to the ATF. Further clarification from the ATF has lead to the determination that the submission of fingerprints and photographs of responsible persons must accompany every Form 1 or Form 4 that seeks to add NFA items to the trust.
Concerns Going ForwardWhile there is over 6 months until 41F takes effect, it is advised that any trust or LLC reevaluate their language and operating parameters of their documents to insure what parties in their documents are Responsible Persons and what will be required. Trusts or LLCs with many trustees or officers may be advised to relegate many of the parties to having contingent powers and roles that are not active until specific events occur in order to limit exposing the parties to filing a Form23 and to ensure easier control over a smaller paperwork pool.