Wednesday, March 29, 2023

Another Small Catch In The Pistol Brace SBR Amnesty Program: You Can't Trust Your Pistol Brace SBR

There's a bit of an annoying limitation in the free tax stamp and amnesty for the arm-brace program. 

You cannot use the free tax stamp Form 1 program to place the arm-brace pistol into an NFA Trust, unless you have documentary evidence that the NFA Trust owned it before January 13, 2023.  An NFA Trust should not have been owning a non-NFA item so that's the fun with that.

The freebie is for individuals only.  

You can see the reasoning for the limitation, such as it is: 

Since it wasn't an NFA firearm before January 13, 2023, the NFA trust would not have owned it before, so it's not a free transfer to an NFA trust now that it has become by decree an NFA item as the NFA Trust was not the owner at the time, and the freebie is for the actual owners of the pistols.

Now, in addition, another reason is that they really don't like NFA Trusts.  

The Trusts take a lot longer for them to process, as they have to run background checks on all active trustees, and if you didn't have your trust done right, the beneficiaries too. They also have to check with their counsel if the trust is even legally sufficient.

You'd be surprised with the garbage a do-it-yourselfer who, instead of paying a attorney who knows how to do these rather specialized trusts, cobbles a trust together based on things they saw on the Internet can do.  As you would expect, the results aren't pretty.

On top of that, the trust owners keep screwing the legally proper trusts up by doing stuff with them without consulting their lawyer (such as adding trustees willy-nilly and keeping the same person as a successor trustee when they are an active trustee, and other fun and games). Many headaches ensue.

In short, I think they're tired of having to process NFA Trusts and the shenanigans involved in them and want individual Form 1s as they are easier to get processed.  

In short, if you want to put your arm-brace pistol into a NFA Trust you either have to do the freebie to yourself first and then do a $200 Form 1 transfer to your trust later.  

The other option is you should disassemble the firearm, do a standard paid-for Form 1 naming your Trust as the Maker, and then reassemble only (and probably out a real stock on it at that point because, why not?) when the approval is completed and you get your approved tax stamp.


Old NFO said...

Glad I never got one...

glasslass said...

Is an individual trust required for each gun?

Aaron said...

Old NFO: They;re rather fun and versatile, but this new reg is definetly making things interesitng.

glasslass: No, multiple NFA items can, and typically are, placed in a single NFA trust for convenience of administration and usage.