FFL's, Chatting w/ The ATF, etc...

[Pete123]

I have learned more about about FFL's in the past couple of days than I ever wanted to know.  Here are some highlights.

 

 

Buying guns with the intent to sell them makes you a dealer which requires a regular FFL.  I have done this and know at least one other member that does this.  I think many of us buy guns, shoot them a while or decide that we don't like them and sell them.  I don't gather that there is any issue with that.

 

The C&R license is for collectors.  The spirit of the law is that you aren't buying with the intent to sell.  That doesn't mean that you can't sell some of them and it doesn't mean you can't make a profit.

 

In practice, their is no way for them to tell if you bought a gun with the intent to sell it.  What they focus on is how often transactions occur.  The guy at the ATF told me that you shouldn't be selling guns every week with a C&R.

 

I've spoken with two folks at the Nashville ATF office in the past couple of days and found them to be very helpful.  While the ATF leadership is under Obama’s thumb, these were friendly folks that wanted to help me figure out how to do what I want to do. 

 

Here is what I want to achieve:

 

1. I spend a lot of money on guns and would like to treat this as a business so I can expense them on taxes.  I haven't gotten this one figured out yet, though I think it will work.  The ATF says you can't be a dealer without a FFL.   You can buy and sell them and you can make a profit - the real issue is how often you buy and sell them.

 

I think making some sales and having a profit here and there meets that requirement.  Refurbishing some gun stocks for pay will also support my case.

 

2. I like refurbishing guns - mainly refinishing stocks.  The only problem is that I don't have any stocks to refinish.  I thought I would buy some guns in rough condition, refinish the stock and remove rust and sell them.  Really not wanting to make a profit, just wanting stocks to work on. I'm grateful to Dolomite for sending a PM letting me know that is illegal.

 

A fellow TGOer has a little Marlin that has been in his family for a long time.  He offered to pay me to refurbish it.  I can't meet him, take the whole gun, bring it to my home, refinish the stock and remove rust from the exterior without a FFL.

 

If he'll remove the stock from the gun, then I can take only the stock and refinish it and there is no issue.

 

Now, the interesting part.  Many of us have been under the impression that you can't get a home based FFL - that you must have a store front.  I remember one guy saying that he would have to pay big bucks for rezoning.

 

As I was talking through wanting to refurbish guns for others, the guy from the ATF said that I may be able to get an FFL at my home.  He said I would need to go an talk with the zoning folks and to make sure to explain what I want to achieve.  He said that if I agree that I won’t be buying and selling guns out of my house and agree that customers can’t come to my house that I may be able to get them to allow it.

 

He inferred that The ATF would issue an FFL under those circumstances if the zoning folks agree to it.

 

What I gathered from both ATF folks is that the issue with them revolves around how many gun transactions you have.  If someone wants an FFL for whatever reason, I would encourage you to call the ATF, let them know what you want to do, and see if they can help you figure out how to do it.  If you want to have a lot of transactions then I expect you'll hear that you need a store front.

 

 

[Ron Padilla]

Thanks for posting, I have been having some thoughts along the same line and have been meaning to call the local ATF.  I guess it is time to go ahead and do that as well as speaking with some one in the county and city offices, as I just did for my limited business license for leather and Kydex.

[Oh Shoot]

Buying guns with the intent to sell them makes you a dealer which requires a regular FFL. ...

That may be how the agent put it, but it's not really correct.
 

What they focus on is how often transactions occur.

That may be closer to it, as far as coming under scrutiny, but it's still not definitive, there's no number of guns or number of guns within a certain time limit that automatically defines unlawful behavior.

 

The test is simply whether you can be proven to be "engaged in the business" of doing so.

 

Per federal law, the definition of that is:

 

"...a person who devotes time, attention, and labor to dealing in firearms as a regular course of trade or business with the principal objective of livelihood and profit through the repetitive purchase and resale of firearms, but such term shall not include a person who makes occasional sales, exchanges, or purchases of firearms for the enhancement of a personal collection or for a hobby, or who sells all or part of his personal collection of firearms"

 

And principal objective of livelihood and profit is:

 

"...that the intent underlying the sale or disposition of firearms is predominantly one of obtaining livelihood and pecuniary gain, as opposed to other intents, such as improving or liquidating a personal firearms collection"

 

Hence, even buying a gun with the intent to sell it before even firing it is no conclusive test of either condition -- perfectly legit to grab a deal new or used on a firearm that you figure you can sell for more, to throw the bucks toward some other heater.  There is no length of time required for one to hold a firearm before selling it, whether transferred through an FFL or in personal transactions where legal. And as you say, whether you make a profit on any particular firearm is not the test either.

 

Of course, sure ... it's ultimately not your call whether you fit under the definition. If I did as much of it as I see some folks doing, especially with firearms they haven't held very long, I'd be pert careful to document where the funds went from each selling transaction. 

 

As an aside, I wonder if the funds even have to go back into firearms at all to fit under "enhancing a personal collection or a hobby", though that may be the intent of that particular wording,  not sure.

 

- OS

Edited December 16, 2015 by Oh Shoot

[DaveTN]

An 01 FFL only costs $200 (or did) I think many of here would gladly pay that. I know I would...in a heartbeat. But it isn’t the BATF that stops most of us; it’s the local laws.

[Oh Shoot]

An 01 FFL only costs $200 (or did) I think many of here would gladly pay that. I know I would...in a heartbeat. But it isn’t the BATF that stops most of us; it’s the local laws.

 

Yup. They won't issue you one unless the locals give you a biz license to do it at the location you want to do it from.

 

- OS

[Pete123]

OS,  I think the law you are quoting is correct.  In practice, I get the impression from both of the folks I spoke with that what they pay attention to is the number of transactions.  That is something they can measure.

 

DaveTN,  I think the key is to talk with local officials with a well planned explanation of what it is that you want to achieve, with questions to determine where their concerns are as well as how you may be able to address those concerns.  My big interest is in refinishing stocks.  

 

If I wanted to be able to take the whole gun in, I would call the ATF and hope for a helpful person.  If I didn't get a helpful one I would call back later.  Once I found the helpful one, I would ask them what the concerns of the local officials are and try to think through with them how I could address that so that I increase my chance for success when speaking with the local official.  

 

Of course, they may turn it down anyway.  However, they may not.  I'm in Davidson County which means I have to deal with the City of Nashville.  It may be a non starter for me with this new liberal mayor.  

 

As they say, you miss 100% of the shots you don't take.

[Sam1]

I'd like to get one for the sole purpose of being able to buy post 86 fun button guns, and for no other reason.

 

Wish they would come out with a new tax stamp or something for that purpose.

[Dane]

I think the other reason people shy away from home based ffl is that your house can be searched at any time without cause. If I remember correctly.

[Pete123]

It sounds like many have interest.  Here is my thinking.  I spent much of my career as a salesperson selling expensive solutions that would be a mess if implementation didn't go well.

 

I was never one for the pushy, manipulative stuff.  If a prospect had interest, I spent at least half of my time thinking about risks that would concern them and what to do.  Of course I would ask them about concerns, though folks won't always share them.  Most people will worry that a decision will make them look bad, or worse, cost them their job.

 

When dealing with government workers, they tend to be very, risk averse.  The key is to work to figure out what the risks are that they will see and develop things to do to minimize their risk.

 

Common ways I would do this is offer to do a smaller pilot, so they can see exactly what they would be getting, letting them talk with existing customers, providing an easy way to get out of the contract, etc...

 

My best thinking is that this is what will increase the likelihood.  If you really want an ffl, hire an attorney that is well connected with county or city leadership.  They can sell it to the boss, who will call the zoning or business license folks and tell them what to do.

[Oh Shoot]

..............  If you really want an ffl, hire an attorney that is well connected with county or city leadership.  They can sell it to the boss, who will call the zoning or business license folks and tell them what to do.

 

He can likely "sell it" the old fashioned 'Mericun way like with liquor licenses, building permits, inspections, easements, etc -- by simply greasing the right palm with the right amount.

 

- OS

[Erik88]

I have a good friend who is currently in the process of becomming a FFL. He's in the final stages. He said the ATF agent was very helpful and professional. The only real issue he had to deal with as with the local zoning commission in order to run a business from his house.

[gregintenn]

So a friend or neighbor isn't allowed to leave a gun with me for the purpose of me making them a holster or repairing their gun since I don't have an FFL or business license?

 

:hiding: Uh oh.

[Oh Shoot]

So a friend or neighbor isn't allowed to leave a gun with me for the purpose of me making them a holster or repairing their gun since I don't have an FFL or business license?

 

:hiding: Uh oh.

 

"Engaged in the business" of being a gunsmith, from USC:

 

" ... a person who devotes time, attention, and labor to engaging in such activity as a regular course of trade or business with the principal objective of livelihood and profit, but such term shall not include a person who makes occasional repairs of firearms, or who occasionally fits special barrels, stocks, or trigger mechanisms"

 

See my previous post for definition of "principal objective of livelihood and profit"
 

Can't say for sure regarding storing others' firearms if not "engaged in the business", but AFAIK it's not federally unlawful in and of itself any more than it is to keep one for a relative or friend or whatever.

 

- OS

Edited December 16, 2015 by Oh Shoot

[Oh Shoot]

"Engaged in the business" of being a gunsmith, from USC:

 

" ... a person who devotes time, attention, and labor to engaging in such activity as a regular course of trade or business with the principal objective of livelihood and profit, but such term shall not include a person who makes occasional repairs of firearms, or who occasionally fits special barrels, stocks, or trigger mechanisms"

 

See my previous post for definition of "principal objective of livelihood and profit"
 

Can't say for sure regarding storing others' firearms if not "engaged in the business", but AFAIK it's not federally unlawful in and of itself any more than it is to keep one for a relative or friend or whatever.

 

- OS

 

Also meant to say, it's not unlawful to be engaged in the business of making holsters without a FFL, so there's only the issue of any firearm storage doing it, but again it seems to me only FFL holders have to abide by the firearm storage rules that go along with that. Of course, getting any shipped to you without an FFL is problematic, actually not possible without violating UPS/FedEx TOS or of course federal law via USPS.

 

- OS

Edited December 16, 2015 by Oh Shoot

[Spiffy]

I can't remember a time when I made a profit selling a gun...broke even a bunch of times and lost my ass a time or 2 but never a profit LOL

[Dane]

So a friend or neighbor isn't allowed to leave a gun with me for the purpose of me making them a holster or repairing their gun since I don't have an FFL or business license?

:hiding: Uh oh.

If you are charging for it then yes it could be considered illegal.

[Pete123]

This is a really good thread that is helping me wrap my mind around some of these issues.

 

Here are considerations on my mind:

 

• What the law says
• How the ATF interprets it - Even if they are wrong, if charged I would have to pay big bucks to an attorney to prove they are wrong.
• What does the ATF consider to be serious - We all speed when driving, usually without consequences unless we are flying.
• What the risks are - I'll bet that Dane is correct that they can come search your home anytime if you have a home  based FFL.
• What is it I'm trying to achieve?  

I want to refinish a stock here and there for others.  Could I meet TGOers, take the entire gun, and probably never have an issue?  Yes, I think so.  However, what I want to achieve is enjoying of refinishing the stock.  I don't need the whole gun, so I won't take the whole gun, which probably reduces liability.

 

If I were making holsters for friends that TGOers, I would think about whether I need to gun to do a good job.  If so, I may take the risk.  In the unlikely event that I were caught, I don't think they would arrest me if I can show ownership of all guns but that one.

 

I've been thinking more about what really concerns the ATF.  Here are my data points:

 

Both folks I spoke with wanted me to be able to achieve what I want, though I can't be a dealer with a C&R license and I can't take guns into the house.  

 

While they did point out these issues, and tell me that I'm expected to honor them, it seemed that where they get concerned is when someone is a dealer that doesn't have oversight by them.  This is where I suspect you go from a friendly warning or reasonable fine to big trouble.  

 

It appears to me that they define being a dealer based on how many transactions you have - which is something they can measure.

 

I know of a guy that bought so many guns one year in TN that the ATF came and paid him a visit.  He was able to show them most of the guns.  I'm sure he sold one or two, but that isn't what they were worried about.  If he couldn't have shown any of them, or just a couple, then I suspect they would have considered him an unlicensed dealer and it wouldn't have gone as smoothly.

 

I don't want to be a dealer - as Spiffy said I usually lose money when I sell.

 

Again, great conversation we have going.

[DaveTN]

Are you going to get busted refinishing or repairing stocks? No, we all know plenty of people that are selling guns as a business; they haven’t been busted. Is an FFL required to be legal for what you want to do? Yes, regardless of how many guns you sell.

The BATF can inspect the area of your home you define as the business. Can they search your house? If they suspect you of something they will get a warrant and search whatever they like; license or not.

I have a C&R and it would not help you with what you want to do.

Since you are doing all this research, go have a chat with your codes department and let us know how that goes. I suspect it will end right there. If it doesn’t I doubt the BATF will be any problem.

Good luck.

[Pete123]

I'm thinking that I won't need one for what I want to do, though need to run it by the CPA.

 

Refinishing stocks - I don't need the whole gun - just the stock.  

 

Ability to expense money I spend on guns - I think I can achieve that as well.  

[MacGyver]

If you're expensing money spent on guns, by definition you have a business.

I guess you can pick the IRS or the ATF, but it sounds like you're going to make one of them mad.

Tread carefully.

[Pete123]

If you're expensing money spent on guns, by definition you have a business.

I guess you can pick the IRS or the ATF, but it sounds like you're going to make one of them mad.

Tread carefully.

 

That's a good point and one that is on my mind.  

 

I like your last sentence, 'tread carefully'.

 

I have plenty of trouble in my life without getting in trouble with either the ATF or IRS.

Edited December 17, 2015 by Pete123

[TNWNGR]

I'm thinking that I won't need one for what I want to do, though need to run it by the CPA.

 

Refinishing stocks - I don't need the whole gun - just the stock.  

 

Ability to expense money I spend on guns - I think I can achieve that as well.  

All you really need to do is find a local gunsmith and work out an arraignment where you refinish some gunstocks for him. You can also make the same arraignment with some local pawn shops. All your taking with you when you leave either business are the gun stocks, the firearm itself stays with the FFL. I've know a lot of fellows who did just this as a sideline. An easier solution for your interest in stock refinishing is furniture repair and restoration. Trust me, you'll make a darn sight more money doing this as well as have more work then with refinishing gun stocks.

[Dustbuster]

Every FFL holder I know always seems to have either fear or aggravation with the ATF I can't see why anyone who loves guns would want to bring the suck factor into their lives to ruin something they love but that's just me

If it was for a full-time business where you have to live off the sale of FF Bill type items them I guess it would all be part of having the necessary evil as someone else said I would tread lightly Edited December 22, 2015 by Dustbuster

[A.J. Holst]

If you're expensing money spent on guns, by definition you have a business.

I guess you can pick the IRS or the ATF, but it sounds like you're going to make one of them mad.

Tread carefully.

For all who have a home based business, part time or otherwise, watch those effers at the IRS...they crave revenues like a fat man wants a double cheeseburger... Edited December 22, 2015 by Gotthegoods

[frankmako]

back in the early 80's i got my ffl. not to sale guns and make money. just a home business with a tax i.d., and business license.  did not sale many guns, just a hand full the whole time. i need it to buy reloading items (powder, primers, bullets) on the cheap. me and the wife was shooting nra silhouette matches (pistol and rifle) every weekend in the west texas area.  between practice and matches we went through lots of ammo each week.  fast forward to the mid 90's my license came up for another renewal.  the government changed everything,,, my home had to be zoned as a business, new finger prints, a letter from local law enforcement that i could have a ffl business in my home and over $300.00 renewal fee. i think there were some other crap i had to do also.  well at this time you could buy reloading items cheap without a ffl.  so i boxed up my license and the little bit of paperwork from the guns sold and turned it all in.  case closed.  no more keeping tags on my match guns stating "not for sale" and other "mickey mouse" things the government wanted me to do.  at this time in american i would not have one, you are just opening yourself up for problems.