Burden of Proof

[geo5120]

receipt for firearm shows a drastic lesser value than it books at. taxes paid on the receipt price or should receipt show signed agreement of buyer and seller to receipt price to keep dealer from excess tax liability upon any audit thanks

[kemasa]

The receipt could be fake and unless there is a good reason why the firearm is being sold for less than the market value, it is a gamble for the FFL.

A signed agreement does help, but it also does not mean anything.

I was told by the BOE that if they found out that the actual purchase price was higher than the receipt, even though the FFL had no idea of that, that the FFL would still owe the additional money, including any interest and penalties.

The FFL could have a signed statement from the buyer that the buyer would be responsible for any and all costs if it turns out that the receipt is not valid, but good luck collecting on that.

[ugimports]

receipt for firearm shows a drastic lesser value than it books at. taxes paid on the receipt price or should receipt show signed agreement of buyer and seller to receipt price to keep dealer from excess tax liability upon any audit thanks

If I get the receipt I use the value on it (unless it's $0).. For all I know this was a fire sale or some other special pricing the seller was doing..e.g, they got screwed in an auction and it actually sold for $.01 and they had to honor it, etc..

[ugimports]

The receipt could be fake and unless there is a good reason why the firearm is being sold for less than the market value, it is a gamble for the FFL.

A signed agreement does help, but it also does not mean anything.

I was told by the BOE that if they found out that the actual purchase price was higher than the receipt, even though the FFL had no idea of that, that the FFL would still owe the additional money, including any interest and penalties.

....

This sucks.. I don't think they have all the time in the world to go do the legwork for this unless they suspected your shop of tax evasion for some other reason, but the fact that they can do this blows.. I don't even know how it would be enforceable.

Say we had the time to actually call each individual seller and ask them how much the customer paid. They could still lie to us and somehow we would be responsible for that. Lame... (I'm just ranting, I don't expect a response to my post)

[kemasa]

If I get the receipt I use the value on it (unless it's $0).. For all I know this was a fire sale or some other special pricing the seller was doing..e.g, they got screwed in an auction and it actually sold for $.01 and they had to honor it, etc..

If you get the auction number, then that goes to show that it sold for that.

If you get a brand new expensive firearm that normally sells for $1k and the receipt shows $100, then you need to ask questions in order to protect yourself. I wonder what the buyer would say if you told them that you ran over it with a truck, so you will pay them what they paid for it. I wonder if a different receipt would show up.

This sucks.. I don't think they have all the time in the world to go do the legwork for this unless they suspected your shop of tax evasion for some other reason, but the fact that they can do this blows.. I don't even know how it would be enforceable.

It puts the FFL in a really bad place. It would not be the FFL's place that would raise the issue, but from the seller. Imagine that the seller is selling a lot of firearms and giving fake receipts so that the CA buyers don't have to pay all of the CA sales tax. The seller gets busted, then all the records are reviewed to see where all the firearms were shipped to and then you a nice bill from the CA BOE.

Well, the BOE enforces the sale tax laws. How are they getting away with saying that a private sale from out of state is now subject to CA sales tax? It is the government and they have "free" (aka tax payer money) to enforce this. You might "win" in the end, but in reality you will lose.

Say we had the time to actually call each individual seller and ask them how much the customer paid. They could still lie to us and somehow we would be responsible for that. Lame... (I'm just ranting, I don't expect a response to my post)

This is why I get auction numbers and print out the page. No valid receipt, no transfer. Yes, CA FFLs are put in a really bad position. The bottom line is if the price seems off, then you need to do what you have to do in order to protect yourself, including refusing to do the transfer. Just remember to not ship the firearm to another CA FFL since as a CA retailer, you would still owe the sales tax. Only ship it back to the seller, once you get the money for return shipping.

I have a policy in which the firearm is consider abandon if there is evidence of sales tax evasion. Yeah, the person could sue me, but I doubt that the judge would be happy with their "dirty hands", which could cause any valid claim to be tossed out in court. The main thing is to scare people into doing the right think. I am not willing to be put at risk for the buyer to save a few dollars and I get nothing but the risk out of it.

[ugimports]

If you get the auction number, then that goes to show that it sold for that...

I usually do this if an auction number is available and no receipt.

I've actually not been in the weird position where the receipt came with a $100 for $1500 item.

I have had a few where it was $50 below my cost which isn't all that unusual really depending how much bulk of a pistol the person is buying..

I also do very low volume so haven't really had an issue arise like this too often that looked really obviously bad.

[Steve G]

I have a policy in which the firearm is consider abandon if there is evidence of sales tax evasion. Yeah, the person could sue me, but I doubt that the judge would be happy with their "dirty hands", which could cause any valid claim to be tossed out in court. The main thing is to scare people into doing the right think. I am not willing to be put at risk for the buyer to save a few dollars and I get nothing but the risk out of it.

I would love to have a gun shipped to you and considered "abandoned". I would have a field day legally!

[ugimports]

I would love to have a gun shipped to you and considered "abandoned". I would have a field day legally!

Can you clarify? I'm curious because I have "abandoned" language in my agreements too and not sure what I would be getting myself into if I acted on it. What right does a consumer have if they haven't started the DROS and are not the actual owner of said firearm or if they were already denied once?

I had a customer that was denied on their DROS a year ago. I wanted to get the firearm out of my safe. I tried emailing and calling, but their phone number had changed. I couldn't get a hold of them, they never contacted me after the initial denial on what to do with it (return to seller or sell on their behalf, etc..). I finally sent them a registered, signature required postal mail letting htem know if they didn't respond in 90 days I would consider the firearm abandoned and will be selling it. They got back to me on ~day 85 that they are still working with DOJ. I'm ok with that (I don't charge storage fees). However, if this goes on another few months I might start charging storage fees. However, if said customer didn't respond until day 120 and I sold their firearm what rights do they really have except to try and collect from the original seller?

[kemasa]

I usually do this if an auction number is available and no receipt.

I've actually not been in the weird position where the receipt came with a $100 for $1500 item.

I have had a few where it was $50 below my cost which isn't all that unusual really depending how much bulk of a pistol the person is buying..

I also do very low volume so haven't really had an issue arise like this too often that looked really obviously bad.

I had a case where there was no receipt, so I asked for one and has given one, but the problem was that the receipt was for an amount lower than the invoice from the distributor, which was accidentally included.

There is also the issue with penny auction sites, which is best to just say no.

[kemasa]

I would love to have a gun shipped to you and considered "abandoned". I would have a field day legally!

The wording is a bit different, but go for it. If you want to attempt to do sales tax evasion and then be upset that the FFL wants no part of it and you lose any rights you have to the firearm, then sue the FFL, it would be very interesting. You do realize that you would have to testify, under oath and penalty of perjury, that you attempted to evade sales tax, which the FFL is responsible for paying and that the FFL refused to do the transfer or anything else with respect to you. At best you might get the value of the firearm, at worst and more likely, you would get free room and board. Ever hear of the term "dirty hands"? Even if you have a valid case, but you have "dirty hands", your case can be tossed out. Attempted sales tax evasion is illegal and by doing so you would be most likely considered to have "dirty hands" and the court is not going to help you.

http://definitions.uslegal.com/d/dirty-hands-doctrine/

[kemasa]

Can you clarify? I'm curious because I have "abandoned" language in my agreements too and not sure what I would be getting myself into if I acted on it. What right does a consumer have if they haven't started the DROS and are not the actual owner of said firearm or if they were already denied once?

Actually, this is a bit different than just an abandon firearm. The actual wording is relinquishing all rights and interest in the firearm due to an attempted illegal act.

The customer does not own the firearm until it is transferred. You can have policies regarding storage and not picking up firearms. It is also a bit different since they don't have legal title to the items, unlike storage units where they actually own the items.

At best the person could sue, but if you have posted policies, to which they agreed to by doing business with you, they don't have much to stand on. Anyone can sue though.

I had a customer that was denied on their DROS a year ago. I wanted to get the firearm out of my safe. I tried emailing and calling, but their phone number had changed. I couldn't get a hold of them, they never contacted me after the initial denial on what to do with it (return to seller or sell on their behalf, etc..). I finally sent them a registered, signature required postal mail letting htem know if they didn't respond in 90 days I would consider the firearm abandoned and will be selling it. They got back to me on ~day 85 that they are still working with DOJ. I'm ok with that (I don't charge storage fees). However, if this goes on another few months I might start charging storage fees. However, if said customer didn't respond until day 120 and I sold their firearm what rights do they really have except to try and collect from the original seller?

You can't charge storage fees after the fact. If you have a storage fee policy, you don't have to charge the storage fee, but you can't suddenly decide that the person owes you storage because they annoyed you. In other words you can't make up a storage policy after the fact.