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Closing the “NFA Trust Loophole” Updated for 2021

NFA Trust Loophole – Obama

The ATF 41P Proposed Rule Change is a 14 pages long presentation of support and data that means to convince the Congress of the imperative need and motivation of rule change. This is the document that means to close the “NFA trust loophole”. With courtesy of the ATF, the motion is open to comments. This leaves parties of the firearm industry the opportunity to sustain their opinion. Many have already done so.

In unanimity, we consent that this motion for rule of change could hit the silencer industry financially in an adverse manner. El Paso Silencer is in business in Texas, Georgia, and New Mexico and we are quite lucky that the CLEOs (Chief Law Enforcement Officers) agreed to sign Form 4s for us. Unfortunately in other states like North Carolina or Texas many sheriffs don’t agree with signing the Form 4 so clients must buy their NFA products through a trust. What the 41P would enforce, and what the ATF would demand is that all sheriffs sign Form4s, no matter who would submit them – an individual or a trust. Their signature would mean that fingerprints and photographs of individuals are satisfactory. As far as the situation goes now, sheriffs may disagree to signing the form, on principle, even if there is no plausible reason why an individual shouldn’t have an NFA item.

When there will be no possibility of acquiring a silencer or a NFA item, there will be no more sales for these items. This would lead silencer dealers all over the country to lose a great deal of their income, very rapidly.  In order to better understand the impact of the 41P implementation, the Wall Street Journal interviewed owner of Silencer Shop, based in Austin, Texas. Dave Matheny, stated that 80% of his sales run through the NFA trusts. His monthly sales reach approximately $1 million. In Mr. Matheny’s case, it’s quite easy to see how an $800,000 drop in monthly sales, due to 41P would negatively impact his business. is a small business, started to chase the American dream. Seeing the possibility of another small business, designed to deliver professional service and products to clients, suffering such a huge damage because of needless government regulations, is saddening. The ATF actually lays out the predicted  cost increase to trusts and other businesses that will be affected by the 41P legislation. But the one cost they don’t mention at all is the complete loss of business for all the silencer dealers in the states where the sheriffs or other CLEOs won’t sign the forms. Perhaps it is not the most inspired idea for a government whose economy isn’t exactly blossoming, to force small businesses to go out of business.

The renowned Gun Trust Lawyer and NFA esteemed member, David Goldman, also made his opinion known publicly. Mr. Goldman has estimated that the ATF’s analysis includes a mistake regarding the increased trust costs which he considers to be to low. The ATF came to this lump sum conclusion based on two major players listed on each trust or company documents. Indeed, we at El Paso Silencer, actually see many trusts that list one or two persons as responsible.  We see even more trusts that list at least 3-5 responsible persons. The reason this happens, at least what we know through our own experience is that at the moment the trust is created, the family members and the close friends like to share the silencers or NFA items. So, this is why we see this quite often, having one trust, that lists 6-7 responsible persons. Obviously, in such cases, all of the responsible persons would need to get fingerprints, photos and CLEO signatures each time they buy an NFA item. We consider this habit might be quite common in many other states as well.

As we’ve stated priory, we don’t have the feeling the 41P would cause damage. Nonetheless we stand united with others that have voiced their opinion regarding the ATF suggested regulations. We take into consideration the possibility of taking on lawsuits against the sheriffs that refuses to sign a Form 4, if authorization as written in the new regulations, doesn’t mean the sheriff is supposed to outer his opinion about the sale procedure – he must only perform his duty of signing the papers that confirm the pictures and fingerprints match the buyer.  We have the strong belief that we must stand up for our client’s freedom of acquiring NFA items. The ATF is open in receiving opinions and arguments until the 9th of December 2013. In case you are interested in presenting your own opinion on the suggested rule change, please do so by following the steps the ATF lays out. You find more information regarding this and you can read the entire proposal on Gun Trust Lawyer’s website. There is a pdf version of the document, ready for the download. We strongly embolden anybody interested in the NFA items to make their opinion known to the ATF, so proper measures can be met or perhaps the rule of change entirely dismissed.

There is also another option, we might suggest to our clients, in case this rule of change will actually be applied. We can urge them to find other eligible Chief Law Enforcement Officers, capable of signing the Form 4. These are: the Chief of Police (an option for those living within city limits), the county attorney or a local judge presiding in your county. See, only because some sheriffs refuse signing, it doesn’t mean there are no more options at all. There are means for vendors and clients to work around the regulation, should it pass Congress. The crucial part in the job of the ATF is keeping firearms out of the reach of criminals. Still, the ATF is not moving closer to that goal by trying to remedy a problem that isn’t even one.  We feel that the ATF 41P rule of change is yet another method for the Obama Administration to fool people in thinking they are on top of gun control. 41P seems to be the solution to a non-existing problem.

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