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  #1  
Old 03-10-2012, 5:10 PM
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Question Falsified sales receipts - what would you do?

Just received a shipment of two new handguns with a hand written receipt from the vendor showing the model of the guns, the buyer's name and date. The value on the receipt ($1795) is 50% of the value of the firearms as listed on the vendor's website. This is quite obviously an attempt to dodge the use tax. What would you guys do?

I really resent being put in this situation.
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  #2  
Old 03-10-2012, 5:45 PM
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Does the buyer have to fill out any sort of form saying that the numbers are true and correct? If so that puts the liability on them.

Or you can assume they are stolen or have other issues due to such a low price and refuse to do the deal.
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  #3  
Old 03-10-2012, 6:03 PM
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I don't see how you could be on the hook. The dealer could have sold them at a loss, or the buyer got a great "good buddy" deal. That's not your problem or business. You're collecting the taxes as required based on the documents furnished to you.
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Old 03-10-2012, 6:33 PM
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Quote:
Originally Posted by EBR Works View Post
Just received a shipment of two new handguns with a hand written receipt from the vendor showing the model of the guns, the buyer's name and date. The value on the receipt ($1795) is 50% of the value of the firearms as listed on the vendor's website. This is quite obviously an attempt to dodge the use tax. What would you guys do?

I really resent being put in this situation.
Collect sales tax based on the vendor's website price.
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Old 03-10-2012, 6:36 PM
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They could have been won at auction.
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  #6  
Old 03-10-2012, 6:45 PM
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The stupid thing is if you ask the BOE, they will probably tell you to collect full price. I would just collect what the receipt says and if they ever have a question, they can subpoena the buyers records and go after him for the crime. Fight them on that in court.

You could also call the seller and ask them about it, reminding them that even the BATFE might be interested that they are falsifying documents, but surely the CA BOE will. Are they sure they want to stick to that claim in case of an audit that will clearly show more money coming out of the guy's account than the receipt?
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Old 03-10-2012, 6:46 PM
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May have been part of a trade or barter situation. I'd go with the paperwork in hand and let the state decide on any enforcement action.

Can the state collect on "helped me build a fence"?



Good thing that this isn't common knowledge. http://redoreceipt.com/ffindex.htm
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Old 03-10-2012, 6:55 PM
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I am confused... why even care....?

Buying a used car from a private seller, people talk aloud and encourage a different amount than what was really paid to avoid extra tax. Never heard of any investigations into things like this.

He is still having to pay tax on the 1795 which is still a hefty bill... I really doubt the BOE knows the exact price of each gun receipt it process and would even question a tax receipt for 1800...

You are going off what was submitted to you... what Liability do you have to that? What do you care? I don't mean to sound mean when I ask this, but this new tax thing BOE is coming down on gun owners for is BS. I can still get things from Amazon tax free.

You are the FFL dealer you do what you want...

Last edited by MacOtac; 03-10-2012 at 7:04 PM.. Reason: do to don't
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  #9  
Old 03-10-2012, 6:55 PM
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Call the IRS.
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Old 03-10-2012, 7:11 PM
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Originally Posted by Riflewizard View Post
Call the IRS.
Why? IRS doesn't collect sales tax.
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  #11  
Old 03-10-2012, 7:25 PM
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Quote:
Originally Posted by MacOtac View Post
I am confused... why even care....?

Buying a used car from a private seller, people talk aloud and encourage a different amount than what was really paid to avoid extra tax. Never heard of any investigations into things like this.

He is still having to pay tax on the 1795 which is still a hefty bill... I really doubt the BOE knows the exact price of each gun receipt it process and would even question a tax receipt for 1800...

You are going off what was submitted to you... what Liability do you have to that? What do you care? I don't mean to sound mean when I ask this, but this new tax thing BOE is coming down on gun owners for is BS. I can still get things from Amazon tax free.

You are the FFL dealer you do what you want...
That is a great attitude to have if you aren't a BOE retail permit holder. The problem with that attitude is the BOE very well might say that the FFL was the retailer and they should have investigated this further and/or collected the sales tax on the retail price, not the fake price. Now the FFL is stuck trying to fight the bill they are now responsible to pay.

The problem with the BOE is FFLs do not have to collect sales tax. However, we have to pay it. So all of those FFLs that aren't collected sales tax are 100% on the hook for any sales tax due come audit time.

That is why he cares. He does not want to potentially take on someone else's sales tax liability by not getting properly reimbursed.
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Old 03-10-2012, 7:35 PM
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Originally Posted by tenpercentfirearms View Post
That is a great attitude to have if you aren't a BOE retail permit holder. The problem with that attitude is the BOE very well might say that the FFL was the retailer and they should have investigated this further and/or collected the sales tax on the retail price, not the fake price. Now the FFL is stuck trying to fight the bill they are now responsible to pay.

The problem with the BOE is FFLs do not have to collect sales tax. However, we have to pay it. So all of those FFLs that aren't collected sales tax are 100% on the hook for any sales tax due come audit time.

That is why he cares. He does not want to potentially take on someone else's sales tax liability by not getting properly reimbursed.

My question is how does the BOE know what the exact sale price is? By the receipt....! right?? The maker of the rifle/ pistol set the MSRP but the dealer can sell it at any price he wants to....right? So what was stopping that seller for selling them at that price? Maybe the seller & buyer had an agreement that made it that final price (sale / refund etc...)

Is it your job as an FFL to be the investigator / judge & jury of sales receipts you receive from other FFL's...?

I am not a vendor / dealer so my opinion will go as far as this post... but, honestly if it is a matter of integrity / fear of the BOE then do what you got to do... I see you confronting the guy on it and he will just have the pistols shipped else where and find a dealer that will do the transfer for the price listed.
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Old 03-10-2012, 7:38 PM
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Why not call the BOE and ask them what their take is on the situation??
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Old 03-10-2012, 7:57 PM
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Originally Posted by MacOtac View Post
Why not call the BOE and ask them what their take is on the situation??
The BOE tells people if they don't believe the price, charge them full retail!

The BOE can easily prove that they paid more when they look at the financial records and see a credit card receipt for more going from the buyer's account to the seller's account.

We really are in a crappy situation, in this case, I might just let them go to another dealer. It certainly isn't worth the $50 transfer fee.
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  #15  
Old 03-10-2012, 8:10 PM
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The BOE tells people if they don't believe the price, charge them full retail! Then charge them full price and end up losing a customer... asked opinions on a public form I gave him mine.

The BOE can easily prove that they paid more when they look at the financial records and see a credit card receipt for more going from the buyer's account to the seller's account.Does the BOE subpena the buyers bank record and go after them? That seems like a long / hard battle to do? They can audit you but how do they know what the buyer /seller really paid / sold it for...? I don't get how you can prove anything... I walk into my local gun store, see his price for a pistol, we negotiate a different price, he sells me it for much less... Could of happened in this situation...

We really are in a crappy situation, in this case, I might just let them go to another dealer. It certainly isn't worth the $50 transfer fee.
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Old 03-10-2012, 8:15 PM
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OP do you check the value of each and every internet FFL transfer? there are tons of ways the transferee could have gotten these items for way under retail. Maybe the other FFL owed the guy some cash? maybe he traded in some firearms and added the amount in order to get those firearms.

You guys think too much.

Quote:
Originally Posted by MacOtac View Post
I am confused... why even care....?

Buying a used car from a private seller, people talk aloud and encourage a different amount than what was really paid to avoid extra tax. Never heard of any investigations into things like this.
This.

Quote:
Originally Posted by G-forceJunkie View Post
I don't see how you could be on the hook. The dealer could have sold them at a loss, or the buyer got a great "good buddy" deal. That's not your problem or business. You're collecting the taxes as required based on the documents furnished to you.
and this.

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Originally Posted by MacOtac View Post
Why not call the BOE and ask them what their take is on the situation??
Call the DOJ about AR pistols and tell me what type of response you get. Same deal with the BOE.

Last edited by Colt-45; 03-10-2012 at 8:18 PM..
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  #17  
Old 03-10-2012, 8:21 PM
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Originally Posted by EBR Works View Post
Just received a shipment of two new handguns with a hand written receipt from the vendor showing the model of the guns, the buyer's name and date. The value on the receipt ($1795) is 50% of the value of the firearms as listed on the vendor's website. This is quite obviously an attempt to dodge the use tax. What would you guys do?

I really resent being put in this situation.
wait maybe he got a deal, made a trade, maybe he did the guy a favor of some kind..... who knows you got the receipt from the VENDOR right, so who has the right to question it , now if it was a hand written note from the buyer i would wonder ....
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Old 03-10-2012, 9:08 PM
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It looks like it boils down to EBR wanting to cover his azz with the BOE. Perhaps request a non-handwritten sales reciept on the vendors stationary?
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Old 03-10-2012, 9:55 PM
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I believe the OP posted in the FFL Forum to get opinions from other FFLs not the general public. Here are some points the general public may not know:
  • The BOE holds the dealer responsible for paying the sales tax not the buyer. The dealer is allowed to be reimbursed by the buyer.
  • The BOE can easily revoke the dealer's seller's permit and put the dealer out of business if they suspect evasion. The dealer would be left to appeal it.
  • The BOE has already said to use MSRP as the basis for computing the sales tax but if the dealer has a receipt that is reasonable then that is OK.

I suspect the OP posted in the FFL Forum to get opinions from other FFLs because he doesn't think the handwritten receipt is reasonable.

OP: make a copy of the handwritten receipt, write "This receipt is true and correct" and have the buyer sign it. Short of collecting tax on an amount reasonable to you or sending the firearm back and telling both the buyer and sending FFL to pound sand, what else can you do?
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Old 03-10-2012, 10:21 PM
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what evidence do you have that the person didn't have a special deal i think you assume too much are you paid to be an appraiser of real value?
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Old 03-10-2012, 10:31 PM
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Quote:
Originally Posted by halifax View Post
I believe the OP posted in the FFL Forum to get opinions from other FFLs not the general public. Here are some points the general public may not know:
  • The BOE holds the dealer responsible for paying the sales tax not the buyer. The dealer is allowed to be reimbursed by the buyer.
  • The BOE can easily revoke the dealer's seller's permit and put the dealer out of business if they suspect evasion. The dealer would be left to appeal it.
  • The BOE has already said to use MSRP as the basis for computing the sales tax but if the dealer has a receipt that is reasonable then that is OK.

I suspect the OP posted in the FFL Forum to get opinions from other FFLs because he doesn't think the handwritten receipt is reasonable.

OP: make a copy of the handwritten receipt, write "This receipt is true and correct" and have the buyer sign it. Short of collecting tax on an amount reasonable to you or sending the firearm back and telling both the buyer and sending FFL to pound sand, what else can you do?
Ummm I have a resale permit.

If I want to sell a $500 item for $100 or a $1000 the tax paid is whats on the receipt.

What is the big discussion about? Tax is being paid. The collection of the tax is on the vendor. The purchaser paid?

Why the drama?

Millions of companies do thousands of transactions. I don't understand?
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They don't believe it's possible, but then Alison didn't believe there'd be 350K - 400K OLLs in CA either.
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Old 03-10-2012, 10:51 PM
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Originally Posted by freonr22 View Post
Ummm I have a resale permit.

If I want to sell a $500 item for $100 or a $1000 the tax paid is whats on the receipt.
Actually not quite true. Try selling a $200 cell phone for $20 to entice customers to signup for a plan. Then see what the BOE wants the tax based on, the $20 or the $200.

Quote:
What is the big discussion about? Tax is being paid. The collection of the tax is on the vendor. The purchaser paid?
The real vendor is out-of-state. The purchaser didn't pay him anything. So, the BOE is holding the CA dealer responsible and the CA dealer needs to be reasonable on the amount collected.

Quote:
Why the drama?

Millions of companies do thousands of transactions. I don't understand?
But they don't need to deal with these "special" circumstances as laid out by the BOE for CA firearms dealers. Nor do the need to worry that the BOE is currently on the warpath towards them as indicated by the letter they sent to every CA FFL recently.


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Originally Posted by bohoki View Post
what evidence do you have that the person didn't have a special deal i think you assume too much are you paid to be an appraiser of real value?
Most gun dealers certainly can be considered to have knowledge of firearm appraisals; at least, they should have. That is their business.
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Old 03-10-2012, 10:54 PM
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I can answer another way. If you were doing 70mph in a 55mph. Would you want me to write down your license plate and turn you in? Only to find out you were on your way to the hospital. What if your wife was on her cell phone driving and I turned her in? Only to find out she was checking in on your sick child. Follow? Maybe another side to the story as many have stated. Not what you wanted to hear, none-the-less, my opinion. You did post for an opinion. My opinion? Not into "hall monitors". I work, have a family, so personally, I have better things to worry about.
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Old 03-10-2012, 11:01 PM
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I can answer another way. If you were doing 70mph in a 55mph. Would you want me to write down your license plate and turn you in? If your wife was on her cell phone and I turned her in. Would you tell your wife she it coming or complain I had nothing else better to do? Follow? Not what you wanted to hear, none-the-less, my opinion. You did post for an opinion.
Now that there is funny.

How about if the judge told you that you were the one that was going to have to pay the fine if you didn't or underestimated the violation?
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Old 03-10-2012, 11:03 PM
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Politely Halifax,
I buy things out of state all the time, they are as far as the boe is concerned no different than guns. I bet in the last 23 years, I have directly purchased $7,000,000 in parts and equipment ranging from $30 to $150,000 being employed at 6 companies, including my own (Plural)
Having been through boe audits, whether you are an ffl is irrelevant. The ffl aspect comes into play with the ATF, unless someone else here has special knowledge?
To my knowledge the boe agent handling your account is either alphabetical or address based... I think the latter.

I am not saying " I'm right, your wrong" I am saying based on over 20 years of many industries experience. Food, hvac, sales, wholesaling, contracting, the ATF does not do ffl sales tax is my point.

And they don't revoke your license unless you fail to file and there is some discussion back and forth between both of you before they do.
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They don't believe it's possible, but then Alison didn't believe there'd be 350K - 400K OLLs in CA either.
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Old 03-10-2012, 11:16 PM
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Now that there is funny.

How about if the judge told you that you were the one that was going to have to pay the fine if you didn't or underestimated the violation?
Not going to get baited and get the thread locked. An opinion was asked. I replied.
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Old 03-10-2012, 11:21 PM
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its not your job to enforce or police the law! you must only legally abide by the law,verify the invoice with the seller and tax accordingly.anything other than that would be fraudulent.
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Old 03-10-2012, 11:22 PM
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Originally Posted by arsilva32 View Post
its not your job to enforce or police the law! you must only legally abide by the law,verify the invoice with the seller and tax accordingly.anything other than that would be fraudulent.
This!!!! That's what I was saying!
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They don't believe it's possible, but then Alison didn't believe there'd be 350K - 400K OLLs in CA either.
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Old 03-10-2012, 11:24 PM
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Originally Posted by freonr22 View Post
This!!!! That's what I was saying!
x2!
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Old 03-10-2012, 11:26 PM
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Originally Posted by EBR Works View Post
Just received a shipment of two new handguns with a hand written receipt from the vendor showing the model of the guns, the buyer's name and date. The value on the receipt ($1795) is 50% of the value of the firearms as listed on the vendor's website. This is quite obviously an attempt to dodge the use tax. What would you guys do?

I really resent being put in this situation.
Is that what you paid the vendor? If so, you are good to go.. If not, and they give you terms, just pay the receipt. ? I don't understand?
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We will win. We are right. We will never stop fighting.
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They don't believe it's possible, but then Alison didn't believe there'd be 350K - 400K OLLs in CA either.
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Old 03-10-2012, 11:28 PM
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I'll say it once again then I'm going to bed:

I believe the OP posted in the FFL Forum to get opinions from other FFLs not the general public.
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Old 03-10-2012, 11:38 PM
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I don't dispute that, all I am saying, is the boe doesn't put a task force towards the ffls.
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Originally Posted by dantodd View Post
We will win. We are right. We will never stop fighting.
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Originally Posted by bwiese View Post
They don't believe it's possible, but then Alison didn't believe there'd be 350K - 400K OLLs in CA either.
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Originally Posted by louisianagirl View Post
Our fate is ours alone to decide as long as we remain armed heavily enough to dictate it.

Last edited by freonr22; 03-11-2012 at 8:25 AM..
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  #33  
Old 03-11-2012, 7:37 AM
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Nearly all of these examples again fail to account for the fact that the CA FFL dealer is responsible for remitting sales tax. If the incorrect sales tax is remitted, the CA FFL dealer is responsible for making up the difference, plus penalties and interest.

It is called low hanging fruit. The end user who is cheating his taxes is not the low hanging fruit, the BOE permit holder is. So the BOE might tell the dealer they should have collected more.

Now, the dealer can always fight this, but how much does a lawyer cost? Does the BOE care how much they spend on lawyers a year?

So the problem with all of you saying, "Don't worry about it" is you share none, absolutely none of the liability. The BOE permit holder, aka CA FFL dealer, does.

So it is really poor advice to use analogies of other people speeding in their cars and are you going to report them for that. That in no way takes into consideration the observer could actually be held accountable for the speeder's action and could potentially end up paying the speeder's fine at no expense or liability to the speeder.

Personally, I would rather lose a $50 transfer customer that is trying to cheat the system at my expense. Sorry, the almighty dollar doesn't run my life. However, since it is important, a customer trying to stick my business with their tax liability and potentially costing me a lot of money isn't worth the eventual payout.

And that isn't a big deal. Don't come use my store. I have plenty of other business other than transfers and I really haven't run into this problem. My customers do not lie to me and tell the truth about how much they paid. So for me this is a non-issue.

However, if it became an issue, I would contact the seller and ask them to resend the receipt on a non-handwritten receipt. I would further use a little scare tactics and inform them the BOE checks on these things and if they looked at the customers credit card statement and the seller's merchant account and there was more money in this transaction than was reported, if the CA BOE didn't come after the seller, the ATF most certainly might find this interesting (not a total lie, the ATF does check state laws while auditing).

If after all of that, I might still do the transaction and note down all of the steps I took to ensure I was collecting the proper sales tax. Or I might just tell the guy to see if he could find someone else to do his transfer.

It is what it is.
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Old 03-11-2012, 8:15 AM
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To all the FFLs that responded, Thanks!

Wes, thanks for the clarity. That will be our plan of action in this instance and our future policy.
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  #35  
Old 03-11-2012, 8:40 AM
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Been there, done that.

Quote:
Originally Posted by G-forceJunkie View Post
I don't see how you could be on the hook. The dealer could have sold them at a loss, or the buyer got a great "good buddy" deal. That's not your problem or business. You're collecting the taxes as required based on the documents furnished to you.
You need to talk to the BOE and learn what reality really is. The BOE does not care about the receipt. They say that if they find that the price paid was higher, then the FFL owes the tax on the real amount.

This very much makes it the FFL's problem and business.

Quote:
Originally Posted by arsilva32 View Post
its not your job to enforce or police the law! you must only legally abide by the law,verify the invoice with the seller and tax accordingly.anything other than that would be fraudulent.
Incorrect, the FFL is require to properly pay the sales tax and if the FFL knows or has reason to believe that the receipt is false, then the FFL needs to protect their business and do something about it.

Your last sentence is completely false. It is not fraudulent to tax based on a different amount when the receipt appears to be false. It is an obligation actually.

I went through this a short time ago. In my case the shipping FFL did not include a receipt with the firearms, but did accidentally include the invoice for one of the firearms that he just purchased. I asked for a receipt and was given one that showed a price lower than the invoice. When pushed a bit, the FFL sent a copy of one of the checks sent, but that was still too low since it did not account for shipping. As it turned out, a third party paid for shipping. The FFL said to talk to the customers, but I said that I needed a receipt from him since he is the one that sold them. I told him that unless I got a valid receipt, I would not transfer the firearms. Due to his attitude, I also told him that I would not be part of tax evasion and might just turn the firearms over to the local police, to which he said that I couldn't (he loved to tell me what I couldn't do), but more on this later.

It turned out that the buyers was not aware of the stupidity of the FFL. It appears that the FFL was just being lazy or stupid and since I needed a receipt, he just made one up. Due to this I worked with the buyers. During this process, the stupid FFL called the CA DOJ to complain, saying that the buyers were complaining, which was false. The DOJ called me and the person was a bit nasty at the start. After I explained things, the attitude went away. I got the shipping receipt (which was another story since the UPS account number was messed up and it was charged to someone else, to which UPS said that they would only correct it if that company complained) and call the DOJ to tell them that. The person who I had been talking to told me that she told the FFL that I could turn the firearms over to the local police and then he could deal with it. It did not go quite the way he expected :-).

Due to all of this, I added a new policy:Any false information given or any indication that the transaction might not be legitimate/legal will cause the cancellation of the transaction, as well as relinquishing all rights and interest in the firearm involved.

So, what I would do is to determine if the buyer was involved in this fraud/tax evasion. I would give the FFL and the buyer one (1) opportunity to provide a correct receipt, backed by proof of payment (check, credit card receipt, etc.). If they fail to do so, I would refuse to transfer the firearm. I would not ship the firearm to another FFL, especially in CA since you could be liable for the sales tax, and I would not ship it back to the FFL due to the fraud and that you will know that they are going to attempt this fraud on another FFL. I would be tempted to charge storage until it is resolved or turn the firearms over to the local police.

If they don't show a complete change in attitude, tell them that you are going to report it to the BOE as well.

BTW, the BATF does not care about sales tax issues, including tax evasion. I asked a person that I know.

The bottom line is that you need to do whatever it takes to ensure that you are not putting your business at risk. The BOE goes after the easy target and don't seem to care about explanations nor the rock and hard place that the FFL is put in.
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  #36  
Old 03-12-2012, 6:13 AM
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I like the "show me your cancelled check/credit card receipt" idea.
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  #37  
Old 03-12-2012, 6:20 AM
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Originally Posted by tenpercentfirearms View Post
I like the "show me your cancelled check/credit card receipt" idea.
This. I know at least two (local to the OP) people who could possibly get big discounts because of their professions. Neither profession is related to the other and neither are LE.
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Old 03-12-2012, 9:13 AM
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Quote:
Originally Posted by tenpercentfirearms View Post
I like the "show me your cancelled check/credit card receipt" idea.
If I were in the business, THIS is the method I would use to confirm something that seems inconsistent with posted pricing.

I would default to a sales receipt that is consistent with posted prices (give or take a bit for haggling); followed by using the latest posted price (often different from MSRP) if it doesn't seem to match up; followed by the cancelled check/creditreceipt if they insist they really paid less; followed by MSRP if none of this is available (unlikely in the age of google, gunbroker, and the like).
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Old 03-12-2012, 10:44 AM
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Originally Posted by halifax View Post
Most gun dealers certainly can be considered to have knowledge of firearm appraisals; at least, they should have. That is their business.

Not the best argument.

A gun dealer would never ever offer less than true market value for a firearm?

How many stories have we read on this forum about gun shops offering and paying disgraceful amounts to people who didn't know what their guns were worth?

Next thing I know the .gov will be offering true market value at gun buy-backs.
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Old 03-12-2012, 7:10 PM
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Originally Posted by halifax View Post
Actually not quite true. Try selling a $200 cell phone for $20 to entice customers to signup for a plan. Then see what the BOE wants the tax based on, the $20 or the $200.
Unless the buyer of the guns was given a discount because he signed a service contract, I fail to see what that has anything to do with the matter at hand.
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