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**Fate** · 08-21-2008, 2:15 PM

2. The Third-Party Inquiry. A third-party inquiry is broader
than a simple tracing inquiry, but otherwise involves the same
principles and recommended reactions. It could be a telephone
call, but will ordinarily be a personal visit by one or more
special agents who are after more detailed information than just
the acquisition and disposition of one or more firearms which have
passed into or through your inventory. All other factors remain
the same and your responses should be the same as for the in-person
tracing inquiry.

Needless to say, if the inquiry is not about a third-party
transaction but rather is directed solely at you, invoke RULE ONE
and seek legal counsel immediately. Remember, refusing to talk to
federal criminal investigators and seeking legal counsel are not
admissions of guilt or signs of a guilty conscience. They are
manifestations that you are an American citizen aware of your legal
rights and an individual who will not be bullied, coerced or
frightened into giving up those rights. The agents already believe
you are guilty; their job is to prove it. Your job is to avoid
helping them prove it.

3. The Undercover Solicitation. This may be a contact by
BATF which, if you are fortunate, you never learn was made. It is
a sad fact that a high percentage of non-violent federal gun crimes
committed in the United States (perhaps even a majority) are
manufactured by BATF -- crimes that would never have occurred but
for the fact of an offer from or solicitation by a BATF informant
or undercover agent to an unwitting citizen. Technically, most of
these BATF-sponsored offenses do not rise to legal entrapment. But
they would never have happened if BATF had not planted the idea and
created the opportunity. This is done for the simplest and ugliest
of all bureaucratic reasons: agent and agency self-preservation and
budget and case statistics.

Sometimes you will know you are being shopped -- perhaps by
recognizing the agent or perhaps by the sheer stupidity of the
approach. You are probably also being recorded, possibly even
videotaped. Your response should be precisely the same whether it
ultimately turns out that you were speaking to a government
microphone or to the village idiot. You should firmly, but not
politely, advise the proponent that what he/she is proposing is
illegal and that he/she is no longer welcome on your premises or at
your table. Then remember RULE ONE. Do not engage in a discussion
of the law or alternative solutions to the "customer's" proposal;
terminate the conversation. Politeness is not called for when
someone is either intentionally or ignorantly soliciting you to
commit a federal felony. And your politeness on a federal tape
recording in a subsequent criminal prosecution can often be
construed as acquiescence in or lack of strong feeling about
committing a crime.

Some of my bolder clients, who are truly tired of being
harassed this way, are fully prepared to make a citizen's arrest in
such circumstances and then call the local sheriff to come collect
the offender (attempts and solicitations to commit an offense are
also crimes under federal and state law). If this appeals to you,
make sure first that the law of your state permits a citizen's
arrest. Know the amount of legal force you can use to effect such
an arrest. Then cuff the son of a ***** and give him a taste of
what he's probably trying to do to you.

A criminal solicitation by someone you've known for years, and
who you know cannot be an agent, is especially dangerous. It
probably means that your acquaintance has gotten his own tail in a
crack and is now making cases for BATF in an attempt to lighten his
own load. Finally, bear in mind that an undercover approach may be
made by a female agent or by a mixed couple.

4. The Compliance Inspection. Compliance inspections are
conducted by inspectors of the regulatory enforcement branch of
BATF. These individuals have no criminal law enforcement authority
-- or training (although they have recently been issued badges,
perhaps in an effort to bolster morale or create an appearance of
authority for low-paid personnel). Theoretically, inspectors are
charged with the civil and regulatory aspects of firearms law.
They do not have the power of arrest or the authority to serve
subpoenas or warrants. Nor may they make seizures of any kind. I
say "theoretically" because in some recent instances inspectors
have been observed accompanying special agents on raids and even
illegally carrying firearms. In short, there are some cop wannabes
among the inspector force whose intrinsic suspicion of firearms
dealers as criminals must be guarded against.

The legally-authorized purpose of compliance inspections (and
pre-licensing inspections) is to ensure that the firearms statutes
are generally being complied with by the firearms industry. The
true job of inspectors is to spot and correct discrepancies in
compliance with federal firearms statutes, to establish the
qualifications of license applicants, and to enforce and collect
the excise tax on the manufacture and importation of firearms. If
an inspector discovers evidence of a criminal violation he is
supposed to make a referral to the criminal enforcement branch of
BATF (the special agents).

As a licensee you are required to display your license on your
licensed premises, to maintain certain required books and records
accurately, and to submit to a compliance inspection of your
licensed premises, your inventory and your required records as
often as once annually.

The only firearms records which you are required by law to
maintain, and to submit for inspection, are an acquisition and
disposition book (your bound book), original BATF Forms 4473,
"Firearms Transaction Record" for each firearm sold, original BATF
Forms 5300.35 "Statement of Intent to Obtain a Handgun(s)" (the
Brady Act form), and your retained copies (copy 4) of BATF Forms
3310.4, "Report of Multiple Sale or Other Disposition of Pistols
and Revolvers" for each multiple sale of handguns. Special
occupational taxpayers may also be required to produce their Forms
2, 3, 5, 6 and 10 for firearms on hand. There may be additional
state law records required of a dealer, but BATF has no
jurisdiction over these records and arguably no jurisdiction to
inspect them.

When a BATF inspector shows up for a compliance inspection,
require credentials to be displayed by everyone present and note
the full name of the inspector(s) in writing. Never permit a
special agent or a state or local or non-BATF federal official to
participate in a compliance inspection. These individuals have no
authority under the inspection laws, and are there for some
different (and more ominous) reason. A state official might have
independent state-law authority to conduct an inspection or
investigation, but he has no right to do it in tandem with a BATF
compliance inspection. You should require other inspectors or
investigators to get in line so that you can deal with them at a
separate time. If they refuse to leave, call the sheriff and swear
out a trespassing complaint. If a BATF special agent, a firearms
specialist from BATF's Technology Branch in Washington (part of the
criminal enforcement branch), or other criminal law enforcement
type is present, this is not an ordinary compliance inspection and
you should immediately terminate it, direct the individuals to
leave and contact legal counsel.

BATF inspectors can inspect at any time during your listed
business hours, without prior notice or appointment. If they do
not give you advance notice then restrict their inspection
activities to your listed hours. If you are subjected to an
unannounced inspection, be on guard. You may be under suspicion or
you may be dealing with one of the cop wannabes. If the inspector
has the courtesy to advise you ahead of time of an intended
inspection you are free to, and should, accommodate the time, date
and hours of inspection to the inspector's convenience. You should
never consent to more than one compliance inspection in any
twelve-month period. Require BATF to obtain an inspection warrant
and immediately seek legal counsel.

Under general principles of law a compliance inspection must
be "reasonable" in terms of time, duration, scope, number of
inspectors, lack of disruption to your business, etc. If the
inspector is reasonable and professional, you should be too. The
process does not have to be adversarial or antagonistic. If the
inspector is not reasonable or professional, keep in mind that your
license does not require you to talk to him, or to provide him
access to your copy machine, rest room, etc. If you are dealing
with an idiot, remember RULE ONE -- and let him bring his own copy
machine. Also remember that he has no right to use your
electricity.

The inspector is legally entitled to inspect all your required
records, your business premises, and your firearms inventory. He
is legally entitled to inspect nothing else. You should not permit
inspection of non-required records unless there is a satisfactory
explanation of why it is desired (such as inspecting a purchase or
sale invoice for the correct serial number where the bound book and
the Form 4473 show different serial numbers for the same firearm).
You should not permit inspection of non-business portions of the
premises when your home is the licensed premises. (When your
business is conducted from your home, you should carefully
delineate that portion dedicated to the firearms business and
confine the business strictly to that portion of the premises.)

(continued)

**Fate** · 08-21-2008, 2:15 PM

You should accommodate the inspector by making copies of any
records desired (within reason). Never permit original records (or
firearms or other property) to be removed from the premises without
a summons, subpoena or court order, and without seeking legal
counsel. The inspector has no power of seizure and may attempt to
bluff his way into removing original records or may try to obtain
your consent. Do not be bluffed and do not consent. Inspections
should be conducted on your premises. (If you store firearms off
premises, the inspector is also entitled to inspect such storage
facilities.)

A compliance inspection of a special occupational taxpayer
will begin with the inspector attempting to reconcile his NFA
Branch printout of Title II firearms shown as registered to you in
BATF's records with the actual Title II firearms in your
possession. He will be unable to do so because of the abysmal
state of the national registry. Have mercy on him and help BATF
untangle its records. Try to refrain from thinking about whose
records and recordkeeping should really be under audit here. The
inspector will also likely need your technical expertise in
identifying anything more esoteric than a rifle, pistol or shotgun.
Try to conceal your contempt for a "federal firearms inspector" who
probably doesn't know a wipe from a baffle, or a lightning link
from a drop-in sear, and who may think a Mauser broomhandle is
something used by a German hausfrau.

If you are a firearms manufacturer or importer, an inspector
may plan to conduct an excise tax audit at the same time as a
compliance inspection. The authority for these two types of
inspections/audits derive from entirely different legal authorities
and they involve entirely separate legal considerations. You
should insist that either the audit or the inspection be conducted
first and separately. The reasons are expanded on under Paragraph
5, below.

Curio and relic (collector) licensees have the legal option of
bringing their records and firearms to the nearest designated BATF
office for a compliance inspection. Although I am unaware of any
compliance inspection of a collector, this is an option to be
considered seriously. The simple truth is that you never want a
BATF employee in your home if it can be avoided.

In summary, the firearms regulatory process does not assume
you are a criminal, but rather seeks to ensure that dealers
generally are complying with the requirements of the law. If bona
fide, the process does not require invocation of your various
rights to notice, counsel, warning, non-self-incrimination, etc.,
which all come into play when you are the target of a criminal
investigation. Unfortunately, BATF sometimes attempts to avoid
these constitutional "inconveniences" by illegally using the access
of civil inspectors to further a criminal investigation without
alerting the targeted dealer. You should never cooperate in such
a subterfuge.

5. The Excise Tax Audit. If you are simply a dealer in
firearms or ammunition, you will have no occasion to undergo an
excise tax audit. However, if you manufacture or import firearms
or ammunition you are subject to audit by the regulatory
enforcement branch of BATF.

The manufacturers excise tax on firearms and ammunition is one
of the most complex and least understood federal tax statutes. It
is said that only three people in the world completely understand
it. One is dead, one went mad trying to explain it, and modesty
prevents me from naming the third. Suffice to say, however, that
BATF, which acquired jurisdiction over the tax from IRS in 1991, is
hopelessly inept in administering it.

An excise tax audit is governed by the general principles of
the Internal Revenue Code of 1986 and not the National Firearms Act
of 1934 or the Gun Control Act of 1968.

You are required to maintain the same records any other
taxpayer/return filer is required to maintain: whatever records are
necessary to support the figures on your return. There are no
records specifically required by law to be maintained such as those
required of dealers by the Gun Control Act. And, absent tax fraud
or evasion, there are no criminal penalties for failing to maintain
such records. Therefore, the only penalty for failing to keep
excise tax records, or to produce them, is that BATF could choose
to treat all your sales as taxable events.

As a practical matter a logbook of operable Title I firearms
manufactured by you plus any BATF Forms 2 (Title II firearms
manufactured by you), and a file of BATF Forms 6A, operable
firearms imported by you, accompanied by your bound book showing
the same firearms sold by you and sales invoices showing the sale
price, would be all the records required for a proper excise tax
audit (in addition, perhaps to your retained copies of excise tax
returns filed). You should decline to produce any other records
for an excise tax audit unless you have an alternative pricing
issue under the excise tax regulations or tax-exempt sales (to a
government entity, the military, or for export).

You should also be aware that the definition of firearm under
the excise tax statute is different from other statutory
definitions of "firearm." Excise taxable firearms are only those
complete portable firearms which go bang. The tax does not apply
to crew-served weapons, silencers, frames or receivers, conversion
kits, parts, most destructive devices, etc., etc. The tax only
becomes due on a sale or its commercial equivalent. A transfer of
a complete Title II firearm which goes bang is not always a sale
and does not always trigger the excise tax. Even when it is a
sale, it is not taxable if the Title II transfer tax is being paid
(a Form 4 transfer). There is also no excise tax due on the
manufacture or importation and sale of blank ammunition. I cover
these points because BATF inspectors are generally excise-tax
illiterate and much excise tax is asserted and collected which is
not legally due and owing.

If you are a firearms manufacturer or exporter, you should
have competent tax counsel.

(continued)

**Fate** · 08-21-2008, 2:16 PM

6. The Raid. This is an event which means you are in deep,
serious. It is the execution of a judicially-issued search and
seizure warrant (and occasionally also an arrest warrant) by BATF
special agents, frequently accompanied by agents of other federal
or local agencies, on premises owned, occupied or inhabited by you.

When a raid team shows up at your premises and announces
(usually by breaking down your door, sometimes by killing your dogs
and throwing flash bang grenades at your women and children) that
they have a federal search warrant, you must instantly do several
things. You must first of all mentally assimilate the fact that
they are law officers rather than a rampaging motorcycle gang
(which they often resemble in both appearance and behavior).
Having identified them as law rather than outlaw, you must freeze
in place in a non-threatening posture and attempt to stabilize the
situation until some of their law-enforcement adrenalin (the most
dangerous drug on the street) has bled off. If only a search
warrant is involved, you must then recover your wits sufficiently
to do the following:

(A) Try to note and record the identities of as many
participants as possible, by name, agency, badge number, and
physical description.
(B) Ask for a copy of the warrant.
(C) Disable -- not unplug, disable -- your telephones and fax
machines.
(D) Gather your family, children and pets and leave the
premises.
(E) Call your lawyer.

You may be prevented from doing some or all of the above
things by legally illiterate agents, but that will simply lay the
foundation for your own day in court.

A federal search warrant authorizes only the search of a
specified premises and only the seizure of specifically described
items. Corollary to the execution of a warrant, the law permits
the agents to make a forcible entry if that becomes necessary after
knocking and announcing their identity and purpose, to control the
premises, and to take reasonable precautions for their own safety
-- such as a pat down for weapons of those persons present and
assigning an agent to watch over and accompany anyone moving about
on the premises. The law authorizes the agents to prevent the
destruction of evidence or contraband and it protects them against
being assaulted or interfered with. It is a serious federal crime
to assault a federal officer or to obstruct execution of the
warrant. Don't turn a possible later indictment into a sure one.

Never assist the raiding party in locating the items described
in the warrant. They have the right to search, but not the right
to find. Do not open locked compartments, safes or rooms for them
or provide them with keys or combinations. Do not talk to the
raiding officers other than to request identification and a copy of
the warrant. Resist the compulsion to show what a good guy you
are; these are not your friends and they are not there to help you.

A search warrant does not authorize agents to arrest you or
anyone else on the premises (although assaulting the agents or
forcibly interfering with the execution of the warrant will justify
a warrantless arrest) and it does not authorize them to handcuff
you, restrict you to a particular place or prevent you from
leaving.

You have a perfect right to leave the premises and should do
so immediately. If you are physically prevented from leaving, you
have just been falsely arrested in violation of the Fourth
Amendment and will have your recovery later in court as well as
taking some of the other retaliatory measures promised in Paragraph
2, above. You must get yourself and your family out of the house
for several reasons: (A) to avoid the personal insult, humiliation,
provocation and indignities which many agents seem to enjoy; (B) to
avoid a potential life-threatening situation; and (C) to avoid
creating evidence against yourself (RULE ONE). There is no useful
purpose your remaining on the premises can serve; if the agents are
going to plant evidence or destroy property, they will do it
whether or not you are present.

You will need as much information about identities, badge
numbers and descriptions as you can manage in the minutes before
you leave. These will be useful later when you assert or defend
your rights. But they are not a reason to delay leaving the
premises promptly. You are legally entitled to a copy of the
warrant, but do not remain on the premises if you are refused.

You should disable your telephones and fax machines before
leaving in order to prevent the agents from illegally seizing
evidence (calls and faxes) which might come in while they are on
the premises. Such items did not exist when the warrant was signed
and cannot possibly be covered by the warrant. Their seizure will
probably therefore be illegal; but it is better to prevent such
seizures from even happening. If you are physically prevented from
disabling your own property, go somewhere else and place incoming
calls to all your lines and keep the circuits open.

Now, call your lawyer.

[The author is a retired U.S. Department of Justice lawyer and
a retired colonel in the Marine Corps Reserve practicing firearms
law in Greensboro, NC. He is a 1959 graduate of the University of
Kentucky and a 1962 graduate of the UK College of Law, where he was
Note Editor of the Kentucky Law Journal.]

**savasyn** · 08-21-2008, 3:57 PM

Wow, thanks for that!
That's a lot to absorb, but well worth reading.

**finfan** · 08-21-2008, 8:13 PM

+1 Very informative ... & scary

**halifax** · 08-21-2008, 9:46 PM

That's great thank you.

I'm curious about this one though:

The only firearms records which you are required by law to
maintain, and to submit for inspection, are an acquisition and
disposition book (your bound book), original BATF Forms 4473,
"Firearms Transaction Record" for each firearm sold, original BATF
Forms 5300.35 "Statement of Intent to Obtain a Handgun(s)" (the
Brady Act form), and your retained copies (copy 4) of BATF Forms
3310.4, "Report of Multiple Sale or Other Disposition of Pistols
and Revolvers" for each multiple sale of handguns.

Don't know what that one is.

**OCArmory** · 08-21-2008, 10:21 PM

Great read thanks for all the info.
Mike

**chico.cm** · 08-22-2008, 11:21 PM

Thanks. I've added it to my binder.

**hoffmang** · 08-23-2008, 2:47 PM

I believe the 5300.05 form is from the era after the Brady act but before NICS was rolled out.

-Gene

**Mikeb** · 08-23-2008, 3:31 PM

Is there a prize for BEST POST OF THE WEEK? I think we have a winner...
thanks
Mike

**halifax** · 08-23-2008, 3:53 PM

Originally posted by hoffmang

I believe the 5300.05 form is from the era after the Brady act but before NICS was rolled out.

-Gene

Which would be about the time the article was written. Thanks hoffmang.

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