What adh says is true and can be done. The problem comes from what the IRS likes to call "comingling of assets". If a Trust is used to get ATF approval for a NFA item but you, as an individual write the check, do you own it or the Trust?
I spent hours going over these issues with my Trust attorney (thank goodness for flat rate billing) just because my friend the corporate lawyer (actual specialty is electronic comerce and digital security) found several instances of ATF requiring individuals to forfeit items to ATF that had been approved by ATF on standard Trust paperwork because ATF agents subsequently found something about the way the were paid for questionable and decided that the individual had bought the item as opposed to the Trust which made it illegal for the individual to possess even though the individual was a Trustee of the Trust.
I know this sounds really nit-picking, stupid and against all common sense but this is the ATF and Federal regulations/interpretations of regulations that we are talking about.
Do I think that they will go after someone for a single item? Probably not. But I am not willing to save a few hundred dollars and have there be ANY possibility that ATF might decide that I have to forfeit my LMT lower, my AKS-74S, my can, etc. to them. I would rather spend a few hundred to be safe than risk thousands and the legal expenses that go along with ATF crawling into your life. I know a regular FFL at my gun club that spent almost $8000 in legal fees to have the ATF finally agree that he did nothing wrong and drop the case against him. And don't think that for one second they will pay you back for your expenses.
If you do decide to use a Trust document that is not specific to NFA items, please at least follow the three main, DO NOT VIOLATE rules that my attorney gave me:
- Do NOT use the Trust to hold anything other than NFA items.
- The Trust MUST be the purchaser of all items. (There is a way around this for preexisting items by use of a legal document to officially transfer ownership to the Trust.) Open a new bank account that is used ONLY for NFA purchases and only transfer money into it to make NFA and NFA related purchases. (This will be a business account. Mine is with Bank of America so I can do immediate electronic fund transfers from my regular checking account when necessary. This Account gives me checking and a debit card. Using the debit card for ammo, magazines, etc. at least once a month allows me to avoid the monthly fee for the account.)
- NEVER pay cash for an NFA item! You absolutely need the proof of payment method paper trail in case there is ever any question.
I know this may sound like overkill but, as an old First Sergeant of mine once told me, the object is not to survive getting hit but to never get hit in the first place.
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