May, 2000

Part 1 - National Firearms Act Background

You've finally made the decision.  You're going to rise to the next level of cruffling - firearms that are governed by the National Firearms Act (NFA).  You've set it all up - you've bamboozled your significant other into thinking that a Vickers gun will make a nice "conversation piece" in the living room, saved up your cruffle-bucks, and located a source for the firearm you want to purchase.  You've got all your ducks in a row, right?

Probably not. The world of NFA firearms is one that is fraught with legal pitfalls and hazards.  James Bardwell has done an excellent job of wading through the statutory and regulatory requirements that govern possession of and commerce in NFA firearms, and we have reproduced his NFA/Class 3 firearms primer that appears below.  Copyright by James O. Bardwell, 1994, 1995, 1996, 1997.  Permission is given to reproduce this document or portions thereof with attribution, for non-commercial, or non-governmental use only.

In this multipart series, CRUFFLER.COM will explore the ins and outs of owning class 3 firearms.  This month's section provides basic background material on the National Firearms Act.

What are NFA Weapons?

There are two kinds of firearms under U.S. (federal) law, title 1 firearms and title 2 firearms.  Title 1 firearms are long guns (rifles and shotguns), handguns, firearm frames or receivers.  Because of this brad definition, most NFA weapons are also title 1 firearms.  Title 2 firearms are NFA weapons.  Title 2 of the 1968 Gun Control Act is the National Firearms Act (26 USC sec. 5801 et seq.).  Title 1 is generally called the Gun Control Act, (18 USC sec. 921 et seq.). NFA weapons are sometimes called class 3 weapons, because a class 3 Special Occupational Taxpayer license (SOT, see below) is needed to deal in NFA weapons.

These weapons may also be further regulated by states or localities, and while these weapons can be legally owned under federal law, some states and localities further regulate ownership or prohibit it (see below).   The NFA Branch of the Bureau of Alcohol, Tobacco, and Firearms (BATF) administers the National Firearms Registration and Transfer Record, which necessarily encompasses most of the NFA regulation.

NFA weapons are: machine guns, sound suppressors (a.k.a.silencers), short barreled shotguns, short barreled rifles, destructive devices and "any other weapons". A machine gun is any gun that can fire more than one shot with a single pull of the trigger, or a receiver of a machine gun, or a combination of parts for assembling a machine gun, or a part or set of parts for converting a gun into a machine gun.  A silencer is any device
for muffling the gunshot of a portable firearm, or any part exclusively designed or intended for such a device (see discussion below).  A short barreled shotgun is any shotgun (shoulder fired, smooth bore)  with a barrel of less than 18" or an overall length of less than 26", or any weapon made from a shotgun falling into the same length  parameters.  A short barreled rifle is a rifle (shoulder fired, rifled  bore) with a barrel length of less than 16", or an overall length of  less than 26", or any weapon made from a rifle falling into the same
length parameters (like a pistol made from a rifle).

In measuring barrel length you do it from the closed breech to themuzzle, see 27 CFR sec. 179.11.  To measure overall length do soalong, "the distance between the extreme ends of the weapon measured along a line parallel to the center line of the bore." 27 CFR sec. 179.11.  On a folding stock weapon you measure with
the stock extended, provided the stock is not readily detachable, and the weapon is meant to be fired from the shoulder.  A destructive device (DD) is a explosive, incendiary or poison gas weapon, or any firearm with a bore over 1/2", with exceptions for sporting shotguns, among other things (see discussion below). Any other weapons (AOW's) are a number of things; smooth bore pistols, any pistol with more than one grip,(but see below) gadget type guns (cane gun, pen gun) and shoulder fired weapons with both rifled and smooth bore barrels between 12" and 18", that must be manually reloaded (see discussion below).  The above definitions are simplified, to see if a specific gun is a title 1 or 2 firearm one needs to refer to the specific definition under the statute(s), and possibly consult with the Firearms Technology Branch of the BATF (202-927-7910).   There is also case law on the issue of whether a specific item falls into one of these categories.

Owning or Making an NFA Weapon

It is illegal for anyone to have possession of an NFA weapon that is not registered to them in the NFA Registry.   It is also not possible for anyone, except government entities, to register an existing NFA weapon that is not registered, except immediately after one is made by a class 2 NFA manufacturer.  An individual
otherwise able to own any gun under federal law can receive and own any NFA weapon (local law permitting, BATF cannot approve a transfer  where federal, state or local law would be violated by the transferee possessing the weapon in question, see 26 USC sec. 5812(a)(6)) on a Form 4, "Application for Tax Paid Transfer and Registration of Firearm".  Persons who do not hold a Federal Fireams License (FFL) may  only purchase an NFA weapon from a dealer or individual within their own  state. If the weapon is located out of state it must be transferred to a class 3 dealer within the state, before transfer to the non FFL
purchaser.   C&R FFL holders (type 03) may purchase C&R NFA guns from out of state  dealers and individuals.  Those NFA weapons that are classified as C&R's are listed in the Curios or Relics List. Type 01 FFL holders may purchase any fully  transferrable (no dealer samples, see below) NFA weapon, from  an out of state source. If the FFL holder is an individual he must submit  fingerprints, photograph, and the law enforcement certification.

The transfer involves paying the transfer tax, which is $200.00 for all NFA weapons, except AOW's for which the tax is a mere $5.  Individuals also have to get one of several specified local chief law enforcement officers to sign the form (see the section on the law enforcement certification for more information), submit their fingerprints in duplicate, and attach photos of the transferee to the form.   While the transfer tax is
levied by law on the transferor (seller), in practice the transferee (buyer) is expected to pay the tax.  Transfers to individuals tend to take at least 4 months, although subsequent transfers can be quicker.

You can make any NFA weapon, except for machine guns (see below), by filing a Form 1, "Application to Make and Register a Firearm", and paying the $200 making tax, which applies to all of these  weapons, including AOW's.  You may not make the proposed weapon until  the Form 1 is returned to you approved.  The law
enforcement certification, photos and fingerprints also apply to Form 1's, and in fact to any transaction to an individual.

Additionally the manufacturer of any NFA weapon,  including an individual making one on a Form 1 must mark the receiver of the weapon with the maker's name and city and state.  NFA Branch can grant exemptions from this for DD's.  All types of corporations, including corporate type 01 FFL holders, need not do the certification, photo  and fingerprint requirements.   Any of the forms listed, and the  fingerprint cards, are available free of charge from ATF, either in Washington, D.C. or your local office.

The original of the paperwork, particularly any that have tax stamps on them (Form 1 or 4) should be kept in a safe place.  ATF can demand to see the form (see below on your 4th amendment rights).  On a tax paid transfer, ATF puts a tax stamp, like a postage stamp (or like the one that caused the American colonists
to take up arms), on the document.  You paid $200 (or $5) for it, and it is worth that.  It is unwise to lose the original form. They should be kept in a safe deposit box.  Tax exempt forms (Form 2, 3, 5, 6, 10) have no tax stamp, and a copy of the form from ATF, should the original be lost, will be fine.  ATF can
give you a new tax stamp should you lose one, but expect a hard time, and they have discretion in doing it.   It is not unheard of for ATF to have no record in their computer of a weapon registered to you.  The paperwork can avoid a lot of trouble.  Additionally, if the gun in question is a machine gun, not having
the paperwork can lead to being charged with a violation of 18 USC sec. 922(o).  A federal circuit court of appeals has ruled (U.S. v. Just, 74 F.3d 902 (8th Cir.  1996)) that sec. 922(o) prohibits possessing all machine guns, and it is an affirmative defense to such a charge that the weapon was legally possessed
before it took effect.  It is up to the defendant to prove such a defense, but usually by a lower evidentiary standard than the government needs to prove to show a criminal violation  (usually preponderance of the evidence versus beyond a reasonable  doubt).  It is not up to the government to prove the weapon was  not
registered, for a charge under sec. 922(o).  If you don't have the paperwork, and it isn't in ATF's computer, (it is likely they will check, even though they don't have to prove non-registration, they don't want someone to wave a registration form in their face during a trial) you can have a serious problem.

Taxpayer Privacy

The transfer paperwork is nominally a tax return; the purpose of the registration, and the National Firearms
Registration and Transfer Record (Registry) is keeping track of who owes the tax.  ATF takes the position that taxpayer privacy laws apply to a transfer form, and that they may not discuss a pending transfer with anyone but the taxpayer, who is the transferor (seller), as he is responsible for the tax by law. This also serves to allow ATF to refuse to discuss why a transfer is taking so long with the party who is most interested in that question, the transferee (buyer).  The NFA also prohibits the use of the Registry information for any law enforcement purpose except prosecutions for making a false statement on a transfer form (26 USC sec. 5848).   Other tax laws prohibit the release of transfer information, as a tax return, except for certain narrow public safety type circumstances.   See 26 USC sec. 6103, for example.

However, as most NFA weapons are also regulated by the GCA, purchases from a dealer require the completion of the standard 4473 yellow form, as well as dealer bound book records, and this source of information is not so similarly restricted.   ATF may release this information to local law enforcement for a host of law enforcement purposes.  (18 USC sec. 923(g)(1)(D)).

Tax Exemptions

Law enforcement, states, and local governments are totally exempt from the making and transfer (either to or from) taxes, but must comply with the registration requirements.  Federal government agencies, military, and National Guard need not comply with the registration or tax requirements.

There is no tax on transfers to anyone of a weapon that is unserviceable.  Making a weapon unserviceable means it is permanently  altered so that it cannot work, and is not readily restorable.  For  example a gun can be made unserviceable by welding the chamber closed,  and welding the barrel to the receiver or frame.  An unserviceable weapon  is sometimes called a DEWAT, for DE-activated WAr Trophy (see below).

There is no tax on a transfer to a lawful heir from the owner's estate.  Lawful heir just means someone named in a will to get the weapons, or a person entitled to inherit under the applicable intestacy laws if there  was no will, or the will did not apply.  The heir must be able to own the  weapon under state and federal laws.  The heir will have to do all the other  steps of a transfer to an individual.  Unless the heir is a class 3 he may  not inherit post-86 machine guns (and would also need the police demo letter, see below).  The law is uncertain as to a non-class 3 inheriting pre-86 samples (see  below).   A weapon to an heir may also be transferred interstate, if need be; the gun need not be transferred to a dealer in the heir's state, if the  deceased owner resided in another state.

Special (Occupational) Taxpayers (SOT) under the NFA are exempt from some of the making or transfer taxes.  All SOT holders may transfer weapons between themselves tax free.  However a transfer between an individual and a SOT will require the tax.  And unless one has a class 2 SOT, there is a tax on making an NFA weapon, except for making by or on behalf of a government entity. SOT's need not get the law enforcement
certification for any transfer, except DD's (unless they have the appropriate FFL), even for their own personal collection, although in that case they should pay the $200 transfer tax.   They also need not attach a photo to the transfer paperwork, nor submit fingerprints.  The Crime Bill (9/14/94) now requires these things with FFL applications, and SOT applications, however, and ATF was requiring them even before that became  law, since early 1994.   If one plans to engage in  business in NFA weapons, one needs to be a SOT, just as one needs the FFL if they plan to engage in the business with regular firearms or ammunition.

1 - importer of NFA firearms
2 - manufacturer of NFA firearms
3 - dealer in NFA firearms

A class 1 or 2 SOT may also deal in NFA firearms.  A class 3 SOT costs $500 a year, due each July 1.   A class 1 or 2 SOT costs $1000 a year, except that SOT's who did less than $500,000 in gross receipts in business the previous year qualify  for a reduced rate of $500 per year, also due July 1.  One must also
have the appropriate FFL to engage in the specific activity, as well as the SOT. This is because most NFA weapons are also title 1 weapons, and thus both the law regulating title 1 weapons (the GCA) and title 2 weapons (the NFA) must be complied with.  As with the privacy of Registry information and transfer
information, SOT status is also protected tax information, and ATF will not release lists of SOT holders, as they will of FFL holders.

If you were a Class 2 SOT, and thus a manufacturer of NFA weapons you could make, tax free, a machine gun, silencer, short rifle, short shotgun or AOW.  You could also have weapons transferred to you tax free, by other SOT's.   You would also have to have a type 07 or type 10 FFL.   You would not need to ask prior permission of ATF to make the weapon, you would notify them of its making within 24 hours of its making by filing Form 2 with ATF.  You could also import foreign made NFA weapons, for R&D use (one of each, not a bunch of each model).  To import a machine gun you would need a  police letter, but for other weapons they would be considered pre-86 dealer samples.  To import for resale you need a Class 1 SOT.

A sole proprietor SOT may keep any NFA weapon he has after surrendering his SOT, as his personal property, except post-86 machine guns, discussed below.   If ATF thinks, based on the number of weapons retained and the timing, that your SOT status was used to evade the transfer taxes, they may demand tax on all or some of the guns, although you will be entitled to a credit against that for your annual $500 or $1000 SOT tax.

Special Treatment of Certain Weapons

Destructive devices are treated differently, in terms of manufacturing or dealing.  One must have a special FFL, (type 9, 10 or 11, to deal, make or import respectively) and be a SOT to make one tax free or deal in them.  But anyone can make them on a Form 1, tax paid.

Machine guns are also treated differently.  In 1986, as part of the Firearm Owners' Protection Act (FOPA), Congress prohibited individuals from owning machine guns, and made it an affirmative defense  that the machine gun was registered before the act took effect (which was 5/19/86). See 18 USC sec. 922(o) for the law. Thus as an individual you can only legally own a machine gun that was registered before that date.  Any registered after that date can only be owned by SOT's, law enforcement, and government entities.  A SOT may not keep these machine guns after surrendering his SOT.  In order to transfer one of these machine
guns, the SOT must have a request from an agency able to own one for a demonstration.  Or an order from one of those agencies to buy one.   A class 2 SOT can make machine guns for research and development purposes, or for sale to dealers as samples, or for law enforcement.  These are commonly  called post-86 machine guns.

On top of the FOPA machine gun restrictions, any NFA weapon imported into the US after the Gun Control Act took effect (end of 1968) cannot be transferred to an individual.  See 26 USC sec. 5844.  They  can be transferred to SOT's, without any police demonstration request, and kept by the SOT after surrendering his
SOT.   These are sometimes called "pre-86 samples", or "dealer samples", although dealer sample can be used to refer to either a post-86 machine gun or any NFA weapon imported after 1968.

Transporting NFA Firearms

In terms of moving the weapons around, the following applies.  If you are transporting the weapons within your state, it is wise to keep a photocopy of the registration paperwork, whatever it is, (can be Form 1, 2, 3, 4, 5, or 10, as well as other more exotic forms of registration, except you probably would never have a gun on a Form 10, unless you were the police, in which case no one is likely to bother you about a gun you might have anyway) with the gun.  Federal law does not expressly require it, but it would be foolish not to have ready proof the gun is legal.   Many states do require it, they ban all or some NFA weapons, and exempt from the ban those possessed in compliance with federal law.  In such a state you need the federal paperwork to be legal under state law.  If you  were a SOT you should keep a copy of your proof of being an SOT with the
paperwork when you move the guns around.   But an individual who surrenders his SOT can still have weapons that will be registered on a Form 2 or Form 3 legally, so not having a copy of the SOT with such paperwork proves nothing.   You need not ask ATF for permission when you move to a new address within the same state,
nor must you advise them of your new address.

To move weapons between states two rules apply.  An individual must get permission from BATF to move machine guns, short rifles, short shotguns or destructive devices between states (or to temporarily export them) before doing so.  This includes taking them somewhere to shoot them, or when moving. There is a form called a 5320.20, and BATF will always approve them, and fairly quickly, assuming the purpose (generally stated) for the movement is legitimate, and the target state allows the weapon in question. A type 01 FFL can move weapons (except DD's) interstate at will, no permission is needed.  But while most states that otherwise prohibit some or all NFA weapons have exceptions for SOT's, or FFL's, a few do not, and thus the person
must make sure he will not be breaking any laws.  An unlicensed individual need not ask permission to move AOW's or suppressor's interstate, again watch the laws at the target state.   Having the approved 5320.20 form for a suppressor or AOW can avoid hassle while traveling.  This is an easily confused point; many who think they know something about the NFA don't know you only need permission for interstate movement of some NFA weapons.    BATF will approve a 5320.20 for suppressors and AOW's; they will approve a 5320.20
for an FFL also, even if he doesn't need it by law.  BATF will also now approve a form 5320.20 for a period of one year, covering blanket travel to a specific location, if you travel there frequently.    A C&R FFL holder can only move C&R NFA guns interstate without a 5320.20.  See 18 USC sec. 922(a)(4) for the law imposing the  5320.20 requirement.

Lost or Stolen NFA Firearms

A lost or stolen NFA firearm can be a real problem.  It can be a very expensive loss, as well as endangering the continued lawfulness of owning NFA firearms, both at a state and federal level.  Contrary to what you might hear, NFA firearms, machine guns and silencers in particular, are very rare in crime.  A significant source of such weapons in crime is stolen NFA firearms, from law enforcement, the military and civilian
collectors.   A crime spree with a stolen NFA firearm can lead to restrictive state or local legislation, as well as local law enforcement refusing to continue providing the law enforcement certification needed for transfers to individuals.  Safeguarding NFA firearms is not required, but seems to me to be extremely prudent, both to preserve the firearm, as well as its continued legal ownership.  Reporting the theft of an NFA weapon to law
enforcement is the only way to even have a chance at recovering the gun, and preventing its use (or further use) in crime.  Reporting its theft is a good idea.  Below is what is required, as opposed to what is a good idea.

BATF has made up a rule, 27 CFR sec. 179.141, that requires the owner of a lost or stolen NFA weapon to make a report "immediately upon discovery" to BATF including the name of the registered owner, kind of firearm, serial number, model, caliber, manufacturer, date and place of theft or loss and "complete
statement of facts and circumstances surrounding such theft or loss."  However Congress has passed no law authorizing BATF to make such a requirement, and at  a 1984 Congressional hearing then BATF Director Stephen Higgins admitted there is no penalty for not complying.  See "Armor Piercing Ammunition and the Criminal Misuse and Availability of Machineguns and Silencers", Hearings Before the Subcommittee on Crime of the Committee of the Judiciary House of Representatives, Ninety-Eighth Congress, Second Session, May 17, 24 and June 27, 1984, Serial No. 153, G.P.O. 1986, page 129.

However, if one is a FFL holder, one is required by law to report the theft or loss to both local law enforcement and ATF. As part of PL 103-322 (Crime Bill) (9/13/1994), 18 U.S.C. sec 923(g) was amended to require, "(6) Each licensee shall report the theft or loss of a firearm from the licensee's inventory or  collection within 48 hours after the theft or loss is discovered, to the Secretary and to the appropriate local authorities."

BATF has created interim rules to implement PL 103-322, and they are a little more specific, and a little more onerous:

    27 CFR Sec. 178.39a  Reporting theft or loss of firearms.

Each licensee shall report the theft or loss of a firearm from the licensee's inventory (including any firearm which has been transferred from the licensee's inventory to a personal collection and held as a personal firearm for at least 1 year), or from the collection of a licensed collector, within 48 hours after the theft or loss is discovered. Licensees shall report thefts or losses by telephoning 1-800-800-3855 (nationwide toll free number) and by preparing ATF Form 3310.11, Federal Firearms Licensee Theft/Loss Report, in accordance with the instructions on the form. The original of the report shall be forwarded to the office specified thereon, and Copy 1 shall be retained by the licensee as part of the licensee's permanent records. Theft or loss of any firearm shall also be reported to the appropriate local authorities.

    Sec. 178.129  Record retention.

(b) Firearms transaction record, statement of intent to obtain a handgun, reports of multiple sales or other disposition of pistols and revolvers, and reports of theft or loss of firearms.

Licensees shall retain each copy of Form 3310.11 (Federal Firearms  Licensee Theft/Loss Report) for a period of not less than 5 years  after the date the theft or loss was reported to ATF.

This reporting requirement only applies to FFL holders, that is, people licensed by ATF to make, sell, import or collect guns. This does not include people who merely own an NFA weapon.

Repairing NFA Weapons

As it is illegal for anyone to have possession of an NFA firearm  that is not registered to them, getting the guns repaired, or worked on, can be troublesome.  There are two choices: if the gunsmith is in the same state as the registered owner the owner can take the gun in, and wait while it is worked on.   If the owner cannot wait, the gun must be transferred to the gunsmith, on a Form 5, and returned to the owner by filing a Form
5 to transfer possession back to the owner.   If one wishes to have an out-of-state gunsmith work on the gun, even if the owner can wait with the gun, the owner must either transfer it to the gunsmith, or file the form 5320.20 to move it interstate to the gunsmith.   One need not be an SOT  to have NFA weapons transferred to him for repair.   One does need to have a type 01 FFL to work as a gunsmith though.  New York, in a fit of uncharacteristic benevolence, allows licensed gunsmiths there to receive machine guns for repair, when machine gun possession there is otherwise limited to the police, and manufacturers with government contracts.  When submitting a Form 5 for repair one checks the "Other" box in item 1, type of transfer, writes in "repair" next to the box, and submits a letter detailing (generally, e.g. "The purpose of this transfer is to have the [weapon] refinished.") what is to be done.   The back of the form, with the certifications and
photograph need not be completed.  The turnaround time on Form 5's for this purpose seems to be at least a month, or a minimum wait of two months, to transfer it to the 'smith and back.  There is no transfer tax.

Penalties for NFA Violations

A violation of the NFA can result in a felony conviction, punishable by up to ten years in prison, and/or a $250,000 fine.  See 26 USC sec. 5871. The US Sentencing Guidelines ordinarily require prison time, even for
a first offense, however various mitigating and aggravating factors can raise or lower the possible sentence range for a first offense.

The statute of limitations on violations of the  NFA is three years, with the possibility of extension of that time to six years for some wilful violations.  See 26 USC sec. 6531.  The statute of limitations does not begin to run on possession offenses until the possession stops. As long as you possess the contraband item, you are in danger of being prosecuted.

In addition any NFA weapon EVER transferred or registered in violation of the Act is subject to civil forfeiture.   See 26 USC sec. 5872.  A forfeiture proceeding is separate from any criminal prosecution, and
a resolution of a criminal proceeding in favor of the defendant will not preclude a forfeiture action.   See U.S. v. One Assortment of Eighty-Nine Firearms, 465 U.S. 354 (1984).

A violation of 18 USC sec. 922(o) of the GCA can also bring up to a ten year prison sentence, and or a $250,000 fine.  Again, prison time is likely, even on a first offense. Using a machine gun or a silencer in a crime can result in a sentencing enhancement of thirty years, even if there is no NFA prosecution.   See 18 USC sec. 924.

What In Blue Blazes Is A Cruffler??
What Do You Do At Cruffler.Com?
Products & Services
Historic Firearm Of The  Month
Legal And Legislative  Issues
Shops Specializing In C&R Firearms
Links Of Note
Monthly Book Review
Contact Cruffler.Com
Firearms Technical  Trivia
Becoming a Cruffler
Firearm Review
Accessory Review
Secure Communications with PGP
Results >From Cruffler Matches One   And Three And A Consolidated  Match Database!