New machine guns legal for trust, possibly

2nd Amendment and Freedom

Moderators: mpallett, bakerjw

User avatar
ToyotaGuru
Silent Operator
Posts: 54
Joined: Wed Sep 28, 2011 7:16 pm

New machine guns legal for trust, possibly

Post by ToyotaGuru » Thu May 15, 2014 2:03 pm

Take a look at this article http://blog.princelaw.com/2014/05/14/di ... or-trusts/. ATF may have opened the door for us.

johndoe3
Silent But Deadly
Posts: 2689
Joined: Tue Feb 27, 2007 5:02 am
Location: N. Colorado

Re: New machine guns legal for trust, possibly

Post by johndoe3 » Thu May 15, 2014 6:14 pm

Interesting legal twist as a consequence of the ATF in a letter saying that an unincorporated trust is not a person and a NICS check must be done for NFA item to a trust.

Joshua Prince's assertion is that the 1986 Act prohibits new machine gun sales to persons, and since an unincorporated trust is not a person, then it opens the door to unincorporated trusts being legally able to purchase or Form 1 build new machine guns under the NFA.

That would be a welcome turn of events! My Trust too would like a new electric minigun, however, I'd settle for a fully automatic M4.
You can fool all of the people some of the time, and some of the people all of the time...and those are pretty good odds.
Brett Maverick, gambler on TV (also used by Progressive leaders everywhere)

rimshaker
Silent But Deadly
Posts: 1038
Joined: Mon Jul 23, 2012 11:15 am
Location: FL

Re: New machine guns legal for trust, possibly

Post by rimshaker » Thu May 15, 2014 9:42 pm

Even if it's too good to be true, i'm just hoping that these rumors could at least bring down current MG prices somewhat.

User avatar
Bendersquint
Industry Professional
Posts: 11359
Joined: Sat Jan 07, 2006 9:19 pm
Location: North Carolina
Contact:

Re: New machine guns legal for trust, possibly

Post by Bendersquint » Thu May 15, 2014 10:03 pm

rimshaker wrote:Even if it's too good to be true, i'm just hoping that these rumors could at least bring down current MG prices somewhat.
Rumors won't bring down prices, if there is a flood of approvals THAT will bring down prices.

MG prices are not like the stock market.

User avatar
Bendersquint
Industry Professional
Posts: 11359
Joined: Sat Jan 07, 2006 9:19 pm
Location: North Carolina
Contact:

Re: New machine guns legal for trust, possibly

Post by Bendersquint » Thu May 15, 2014 10:05 pm

It's just an opinion letter and nothing more. I seriously doubt it would stick and if it could then the ATF only has to issue another one saying they changed their minds and then its done.

What I would be concerned about is that the ATF might have the legal possibility of eliminating trusts as owners of NFA, since only persons can own NFA. I see that as more of a possibility than anything.

telero
Silent But Deadly
Posts: 161
Joined: Wed Oct 03, 2012 11:05 pm

Re: New machine guns legal for trust, possibly

Post by telero » Fri May 16, 2014 12:19 am

Bendersquint wrote: What I would be concerned about is that the ATF might have the legal possibility of eliminating trusts as owners of NFA, since only persons can own NFA. I see that as more of a possibility than anything.
Trusts are specifically allowed to own NFA. Persons are not allowed to possess machineguns made after the 1986 date.

In 27 CFR 479.11 the definition of person specifically includes trusts. But that section isn't what stops persons from possessing machineguns, it's 18 USC 922, where trusts are not included in the definition of a person.

So a trust can be a person and not a person. They would like it to be that a trust is a person that can't possess a post 86 MG, and that it isn't a person for being able to own NFA. But it actually looks like it's the opposite of that.

User avatar
L1A1Rocker
Silent But Deadly
Posts: 3578
Joined: Wed Feb 21, 2007 7:40 pm
Location: Texas Hill Country

Re: New machine guns legal for trust, possibly

Post by L1A1Rocker » Fri May 16, 2014 1:03 am

Fact remains; the 34 law defined an entity as including trusts. The 89 hughes amendment did NOT include trusts in its definitions. By the black letter of the law, trusts should still be able to purchase and make new machine guns.

User avatar
Bendersquint
Industry Professional
Posts: 11359
Joined: Sat Jan 07, 2006 9:19 pm
Location: North Carolina
Contact:

Re: New machine guns legal for trust, possibly

Post by Bendersquint » Fri May 16, 2014 7:45 am

L1A1Rocker wrote:Fact remains; the 34 law defined an entity as including trusts. The 89 hughes amendment did NOT include trusts in its definitions. By the black letter of the law, trusts should still be able to purchase and make new machine guns.
NFA1934 reads "The term "person" includes a partnership, company, association, or corporation, as well as a natural person."

Nowhere does it specify "TRUSTS".

The above is a direct copy out of the National Firearms Act.

johndoe3
Silent But Deadly
Posts: 2689
Joined: Tue Feb 27, 2007 5:02 am
Location: N. Colorado

Re: New machine guns legal for trust, possibly

Post by johndoe3 » Fri May 16, 2014 1:37 pm

What I would be concerned about is that the ATF might have the legal possibility of eliminating trusts as owners of NFA, since only persons can own NFA. I see that as more of a possibility than anything.
Anything is possible, but since the definition of a "person" for the entirety of 26 U.S.C. is given 26 U.S.C. 7701, then it would require a change in law by Congress, rather than just a rule change by the ATF.

26 U.S.C. 7701 (a) When used in this title, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof—

(1) Person
The term “person” shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.
Bender, I think you're right that the ATF will admit that they made a mistake in the recent Letter, and this issue will go away (since 7701 defines a person for all of 26 U.S.C., and they cannot redefine person since it affects much more in the law than just NFA). However, if the ATF digs in on the issue, then Joshua Prince is likely right that making an application right now for purchase of a newly manufactured machinegun by a Trust should be approved by the ATF.
Last edited by johndoe3 on Fri May 16, 2014 2:11 pm, edited 1 time in total.
You can fool all of the people some of the time, and some of the people all of the time...and those are pretty good odds.
Brett Maverick, gambler on TV (also used by Progressive leaders everywhere)

User avatar
Bendersquint
Industry Professional
Posts: 11359
Joined: Sat Jan 07, 2006 9:19 pm
Location: North Carolina
Contact:

Re: New machine guns legal for trust, possibly

Post by Bendersquint » Fri May 16, 2014 1:42 pm

johndoe3 wrote:
What I would be concerned about is that the ATF might have the legal possibility of eliminating trusts as owners of NFA, since only persons can own NFA. I see that as more of a possibility than anything.
Anything is possible, but since the definition of a "person" for the entirety of 26 U.S.C. is given 26 U.S.C. 7701, then it would require a change in law by Congress, rather than just a rule change by the ATF.

26 U.S.C. 7701 (a) When used in this title, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof—

(1) Person
The term “person” shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.
Bender, I think you're right that the ATF will admit that they made a mistake in the recent Letter, and this issue will go away (since 7701 defines a person for all of 26 U.S.C.). However, if the ATF digs in on the issue, then Joshua Prince is likely right that making an application right now for purchase of a newly manufactured machinegun by a Trust should be approved by the ATF.
According to the NFA Act, there is no wording allowing Trusts to own NFA.

I am simply amazed at how far people are taking an OPINION letter, it holds no legal weight, of all people the Prince should know this.

johndoe3
Silent But Deadly
Posts: 2689
Joined: Tue Feb 27, 2007 5:02 am
Location: N. Colorado

Re: New machine guns legal for trust, possibly

Post by johndoe3 » Fri May 16, 2014 2:20 pm

According to the NFA Act, there is no wording allowing Trusts to own NFA.
Bender, consider that the 1968 GCA and other changes have modified the 1934 NFA. All of the cumulative transfer tax rules are in 26 U.S.C. and as I stated above, the 26 U.S.C. itself defines a person for all of the Title. That's the law. It doesn't matter that the original wording of the 1934 NFA did not include Trusts and Estates as part of the Act for a person (neither did it specifically exclude them), what matters is what is in the U.S.C..

If the current definition of a person was part of the 26 U.S.C. when the 1934 NFA was passed, then that is the reason why Trusts and Estates have always been legally able to own NFA items.
You can fool all of the people some of the time, and some of the people all of the time...and those are pretty good odds.
Brett Maverick, gambler on TV (also used by Progressive leaders everywhere)

telero
Silent But Deadly
Posts: 161
Joined: Wed Oct 03, 2012 11:05 pm

Re: New machine guns legal for trust, possibly

Post by telero » Fri May 16, 2014 3:28 pm

Interesting...

So the US Code Title 18 is where post 86 MGs are prohibited to be transferred or possessed by a person. There is a definition of person within Title 18. That definition of person does not include a trust. Therefore, a trust is not prohibited from transferring or possessing a post 86 MG.

The US Code Title 26 is where "certain firearms" (such as MGs) are allowed to be made or transferred by a person as long as the application/taxing process are followed. It's also where a person is defined inclusive of being a trust. Therefor a trust can make/transfer "certain firearms."

Therefore a trust can make/transfer a post 86 MG.

I think the only thing the letter did was point out the above. Has anyone ever actually argued that point before?
Example:
Trust applies to make an MG
ATF denies application saying a trust would not be allowed to possess an MG
Trust sues saying there is nothing prohibiting it from possessing an MG

User avatar
Bendersquint
Industry Professional
Posts: 11359
Joined: Sat Jan 07, 2006 9:19 pm
Location: North Carolina
Contact:

Re: New machine guns legal for trust, possibly

Post by Bendersquint » Fri May 16, 2014 3:39 pm

telero wrote:Interesting...

So the US Code Title 18 is where post 86 MGs are prohibited to be transferred or possessed by a person. There is a definition of person within Title 18. That definition of person does not include a trust. Therefore, a trust is not prohibited from transferring or possessing a post 86 MG.

The US Code Title 26 is where "certain firearms" (such as MGs) are allowed to be made or transferred by a person as long as the application/taxing process are followed. It's also where a person is defined inclusive of being a trust. Therefor a trust can make/transfer "certain firearms."

Therefore a trust can make/transfer a post 86 MG.

I think the only thing the letter did was point out the above. Has anyone ever actually argued that point before?
Example:
Trust applies to make an MG
ATF denies application saying a trust would not be allowed to possess an MG
Trust sues saying there is nothing prohibiting it from possessing an MG
Yes it has been tried with the same argument and the denialcomes back stating no new MG's into the transferabe registry, only new entries for SOT's and .gov bodies. This has been tried many time, I am aware of at least 6 tries in the last 10 years.

dan9591
Silent But Deadly
Posts: 273
Joined: Tue May 01, 2012 12:07 am

Re: New machine guns legal for trust, possibly

Post by dan9591 » Fri May 16, 2014 4:10 pm

Feeling lucky?

Image

LawBob
Silent But Deadly
Posts: 387
Joined: Thu Jan 22, 2009 12:23 am

Re: New machine guns legal for trust, possibly

Post by LawBob » Mon May 19, 2014 11:02 pm

johndoe3 wrote:Interesting legal twist as a consequence of the ATF in a letter saying that an unincorporated trust is not a person and a NICS check must be done for NFA item to a trust.

Joshua Prince's assertion is that the 1986 Act prohibits new machine gun sales to persons, and since an unincorporated trust is not a person, then it opens the door to unincorporated trusts being legally able to purchase or Form 1 build new machine guns under the NFA.

That would be a welcome turn of events! My Trust too would like a new electric minigun, however, I'd settle for a fully automatic M4.

A historic

Not an historic. Do you say an histogram?

LawBob
Silent But Deadly
Posts: 387
Joined: Thu Jan 22, 2009 12:23 am

Re: New machine guns legal for trust, possibly

Post by LawBob » Mon May 19, 2014 11:06 pm

Bendersquint wrote:
telero wrote:Interesting...

So the US Code Title 18 is where post 86 MGs are prohibited to be transferred or possessed by a person. There is a definition of person within Title 18. That definition of person does not include a trust. Therefore, a trust is not prohibited from transferring or possessing a post 86 MG.

The US Code Title 26 is where "certain firearms" (such as MGs) are allowed to be made or transferred by a person as long as the application/taxing process are followed. It's also where a person is defined inclusive of being a trust. Therefor a trust can make/transfer "certain firearms."

Therefore a trust can make/transfer a post 86 MG.

I think the only thing the letter did was point out the above. Has anyone ever actually argued that point before?
Example:
Trust applies to make an MG
ATF denies application saying a trust would not be allowed to possess an MG
Trust sues saying there is nothing prohibiting it from possessing an MG
Yes it has been tried with the same argument and the denialcomes back stating no new MG's into the transferabe registry, only new entries for SOT's and .gov bodies. This has been tried many time, I am aware of at least 6 tries in the last 10 years.
Yes. This is nothing new except an opinion letter relative to nics.


The opinion letter is prob correct interpretation. The correct interpretation of 922(o) is that it does not incl trusts. However, they will argue that a "person" has to possess the mg.

If we played this out to our favor, only trusts that designated law enforcement or ffl sot 2/7s (iirc) as beneficiaries would be valid "non person" trusts.

LawBob
Silent But Deadly
Posts: 387
Joined: Thu Jan 22, 2009 12:23 am

Re: New machine guns legal for trust, possibly

Post by LawBob » Mon May 19, 2014 11:10 pm

Bendersquint wrote:
johndoe3 wrote:
What I would be concerned about is that the ATF might have the legal possibility of eliminating trusts as owners of NFA, since only persons can own NFA. I see that as more of a possibility than anything.
Anything is possible, but since the definition of a "person" for the entirety of 26 U.S.C. is given 26 U.S.C. 7701, then it would require a change in law by Congress, rather than just a rule change by the ATF.

26 U.S.C. 7701 (a) When used in this title, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof—

(1) Person
The term “person” shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.
Bender, I think you're right that the ATF will admit that they made a mistake in the recent Letter, and this issue will go away (since 7701 defines a person for all of 26 U.S.C.). However, if the ATF digs in on the issue, then Joshua Prince is likely right that making an application right now for purchase of a newly manufactured machinegun by a Trust should be approved by the ATF.
According to the NFA Act, there is no wording allowing Trusts to own NFA.

I am simply amazed at how far people are taking an OPINION letter, it holds no legal weight, of all people the Prince should know this.

You are high. This is the only reason 200,000 people own silencers today. It says trusts.

That was probably a mistake in 1934. Because a trust isn't really an "entity".

User avatar
Bendersquint
Industry Professional
Posts: 11359
Joined: Sat Jan 07, 2006 9:19 pm
Location: North Carolina
Contact:

Re: New machine guns legal for trust, possibly

Post by Bendersquint » Mon May 19, 2014 11:13 pm

Can you please cite where in the National Firearms Act of 1934 it says trusts? I am not seeing it.

User avatar
Armorer-at-Law
Silent But Deadly
Posts: 338
Joined: Wed Dec 31, 2008 2:39 pm
Location: Cincinnati, OH
Contact:

Re: New machine guns legal for trust, possibly

Post by Armorer-at-Law » Tue May 20, 2014 9:27 am

Can you please cite where in the National Firearms Act of 1934 it says trusts? I am not seeing it.
I'll address this. You're right, it is not in Title 18 of the U.S. Code. Specifically, it is 18 U.S.C. (Crimes and Criminal Procedure), Part 1 (Crimes), Chapter 44 (Firearms), which is Sections 921-931. The Hughes Amendment is found in 18 U.S.C. § 922(o):
(o)
(1) Except as provided in paragraph (2), it shall be unlawful for any person to transfer or possess a machinegun.
(2) This subsection does not apply with respect to—
(A) a transfer to or by, or possession by or under the authority of, the United States or any department or agency thereof or a State, or a department, agency, or political subdivision thereof; or
(B) any lawful transfer or lawful possession of a machinegun that was lawfully possessed before the date this subsection takes effect.
18 U.S.C. § 921, provides definitions for that chapter of the code and states:
(a) As used in this chapter—
(1) The term “person” and the term “whoever” include any individual, corporation, company, association, firm, partnership, society, or joint stock company.
The National Firearms Act (NFA) was really a tax law. It is in the tax code, Title 26 U.S.C. (Internal Revenue Code), that "person" is defined for purposes of the NFA tax. 26 U.S. Code, Subtitle E (Alcohol, Tobacco, and Certain Other Excise Taxes), Chapter 53 (MACHINE GUNS, DESTRUCTIVE DEVICES, AND CERTAIN OTHER FIREARMS), includes all of the NFA tax and transfer laws. The definition for all of Title 26 are found in 26 U.S. Code § 7701 - Definitions. It reads:
(a) When used in this title, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof—
(1) Person
The term “person” shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.
Send lawyers, guns, and money...
Armorer-at-Law.com
07FFL/02SOT

User avatar
MCKNBRD
Silent But Deadly
Posts: 356
Joined: Tue Apr 19, 2011 9:19 pm

Re: New machine guns legal for trust, possibly

Post by MCKNBRD » Tue May 20, 2014 9:34 am

Armorer-at-Law wrote:
Can you please cite where in the National Firearms Act of 1934 it says trusts? I am not seeing it.
I'll address this. You're right, it is not in Title 18 of the U.S. Code. Specifically, it is 18 U.S.C. (Crimes and Criminal Procedure), Part 1 (Crimes), Chapter 44 (Firearms), which is Sections 921-931. The Hughes Amendment is found in 18 U.S.C. § 922(o):
(o)
(1) Except as provided in paragraph (2), it shall be unlawful for any person to transfer or possess a machinegun.
(2) This subsection does not apply with respect to—
(A) a transfer to or by, or possession by or under the authority of, the United States or any department or agency thereof or a State, or a department, agency, or political subdivision thereof; or
(B) any lawful transfer or lawful possession of a machinegun that was lawfully possessed before the date this subsection takes effect.
18 U.S.C. § 921, provides definitions for that chapter of the code and states:
(a) As used in this chapter—
(1) The term “person” and the term “whoever” include any individual, corporation, company, association, firm, partnership, society, or joint stock company.
The National Firearms Act (NFA) was really a tax law. It is in the tax code, Title 26 U.S.C. (Internal Revenue Code), that "person" is defined for purposes of the NFA tax. 26 U.S. Code, Subtitle E (Alcohol, Tobacco, and Certain Other Excise Taxes), Chapter 53 (MACHINE GUNS, DESTRUCTIVE DEVICES, AND CERTAIN OTHER FIREARMS), includes all of the NFA tax and transfer laws. The definition for all of Title 26 are found in 26 U.S. Code § 7701 - Definitions. It reads:
(a) When used in this title, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof—
(1) Person
The term “person” shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.
Image
Burn.

User avatar
Armorer-at-Law
Silent But Deadly
Posts: 338
Joined: Wed Dec 31, 2008 2:39 pm
Location: Cincinnati, OH
Contact:

Re: New machine guns legal for trust, possibly

Post by Armorer-at-Law » Tue May 20, 2014 12:39 pm

No burn intended. Just an explanation that took me (as a lawyer) some time to trace out through the many relevant federal laws.


(But I do think Archer is hilarious.)
Send lawyers, guns, and money...
Armorer-at-Law.com
07FFL/02SOT

User avatar
Bendersquint
Industry Professional
Posts: 11359
Joined: Sat Jan 07, 2006 9:19 pm
Location: North Carolina
Contact:

Re: New machine guns legal for trust, possibly

Post by Bendersquint » Tue May 20, 2014 12:48 pm

Armorer-at-Law wrote:No burn intended. Just an explanation that took me (as a lawyer) some time to trace out through the many relevant federal laws.


(But I do think Archer is hilarious.)
No burn taken.

You made my point!

My point is that NFA'34 says nothing about Trusts, its further definitions from other codified law that expands it to Trusts.

It doesn't take much to presume that the ATF might overlook those expansions and make basis off of NFA'34.

User avatar
Bendersquint
Industry Professional
Posts: 11359
Joined: Sat Jan 07, 2006 9:19 pm
Location: North Carolina
Contact:

Re: New machine guns legal for trust, possibly

Post by Bendersquint » Tue May 20, 2014 12:49 pm

LawBob wrote: This is the only reason 200,000 people own silencers today.
Do you have a cite for this figure?

User avatar
Armorer-at-Law
Silent But Deadly
Posts: 338
Joined: Wed Dec 31, 2008 2:39 pm
Location: Cincinnati, OH
Contact:

Re: New machine guns legal for trust, possibly

Post by Armorer-at-Law » Tue May 20, 2014 1:17 pm

My point is that NFA'34 says nothing about Trusts, its further definitions from other codified law that expands it to Trusts.
It depends on what laws you consider to be part of "NFA '34." Clearly the tax code sections were added as part of the NFA when it passed. But they did not specifically define "person." They used (whether intentionally or unintentionally) the definitions that are part of the general tax law. The GCA'68 really replaced the criminal law portions of NFA '34. It is hard now to really separate Title I from Title II in the criminal code, though they remain very distinct in the tax code.

The tax law definitions can't be ignored by ATF and can't be changed by agency regulation, only by Congress. But ATF seems to get away with varied and sometimes conflicting interpretations of the law.

Did Joshua Prince point out an interesting conundrum in the law/regulations? Sure he did. Will ATF accept his argument and approve a Form 1 for a new machine gun? I doubt it. Will a court accept his argument and order ATF to approve a Form 1 for a new machine gun? I also doubt it.
Send lawyers, guns, and money...
Armorer-at-Law.com
07FFL/02SOT

shadow
Member
Posts: 10
Joined: Tue Feb 23, 2010 5:19 pm

Re: New machine guns legal for trust, possibly

Post by shadow » Mon Jul 28, 2014 5:48 pm

Some of you will argue/debate over nothing.

Post Reply