What is with the trust costs?

[cbzdel]

So after being turned down by both the Tacoma Chief of Police and the Piece County Sheriff I messaged the ATF asking who else I could use for an individual form since, and they responded that my only options where the police chief and local sheriff. So that means I am now going the trust route.

So I google NFA trust and find LOTS of options...
-Quicken Willmaker, most common method but also most controversial as well, may not be accepted any more from what i am even reading, yet only costs $30

-Lots of legal companies pop up online, claiming for $75 to $150 they will prepare everything for you. Their websites seem to make everything look really legit, but I am unable to find many reviews on them, yet they all claim money back guarantee that it will work and be correct.

-Then there is going to a lawyers office. I am seeing rates anywhere from $100 to $1000 for a lawyers office to prepare everything.

I guess what I am getting at is I am $3000 already into my SBR (which is currently a pistol) and I just want to be done with it, is the Willmaker really that bad?? I am not looking to transfer from generation to generation, this is just a fun range weapon for me that I intended to just own as an individual but without CLEO approval I am stuck going the trust route.

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[Modeler]

The ATF didn't tell you the whole truth. From the Form 4:

The chief law enforcement officer is considered to be the Chief of Police for
the transferee's city or town of residence; the Sheriff for the transferee's
county of residence; the Head of the State Police for the transferee's State of
residence; a State or local district attorney or prosecutor having jurisdiction
inthe transferee's area of residence
​

I assume that doesn't help you, but I thought I'd throw those out there as options.

 

[Dogfish]

$100 or so for Bronze trust. Do it, and don't look back. I went the Silver route $500) and have lots more flexibility than the bronze.

Yes, you can be cheap and possibly screw something up by doing it yourself.

Your choice.

 

[cbzdel]

I just sent an email to NW Gun Law Group about their bronze package. I stated everything I wanted to do or be able to do and wanted to verify that their bronze package will work for me. I have no problem spending the $100 if it works, when getting in the $300-$1000 it makes me not want to go the trust route.

 

[cbzdel]

Wow I am really behind the curve on this one.. Guess I should of read up on the laws a little better. I spoke with NW Gun Law Group and discovered that the Form 1 is not allowed in WA, and I can only do the Form 4. It would of been really nice when I was at Rainier Arms buying my lower telling them exactly what I wanted to do and they said just fill out this form and all is good.. So seems like I am stuck with my AR pistol at this point until WA changes the laws yet again??

NW Gun Law Group told me that the ATF is approving Form 1's in WA only because they do not know any better.

 

[jbett98]

I have a friend who liked to drive fast in a really nice Mustang that he restored.
He cheaped out on the tires and when he was going around 100 mph, he blew a tire.
Totaled the car.
A rock solid gun trust is where the rubber meets the road in my opinion.

 

[jekbrown]

NW Gun Law Group is simultaneously possibly 'right' and possibly 'wrong'. The fact is, right now, no one knows how the AG will interpret the bill that legalized SBRs in WA. It is entirely possible that the AG will come back and say that 'making' is a no-go...which means using a form 1 to make an SBR in Washington would be illegal. On the other hand, the most important 2 words in the sentence above is "in Washington". There is no question that the law legalizes both possession and transportation of SBRs. There is also no question that the BATFE allows people who have been approved for a form 1 to get help making their firearm from a person/biz in another state. All you have to do is fill out a 5320.20, get it approved, and you're good to go to make your SBR in OR, ID, or whatever state you put down on the 5320.20. So, the process is:

1. buy lower, or rifle, or pistol that will become the SBR
2. get a trust
3. get trust notarized
4. submit form 1 / trust to the ATF, preferably via eforms (much faster)
5. received approved form 1
6. submit 5320.20
7. engrave lower/pistol/rifle
8. receive approved 5320.20
9. drive to whatever out of state location you put down on your form 5320.20
10. make your sbr
11. transport said SBR back to your home in WA.

Done. Washington can't ban SBR making in OR, no matter what the AG says. OR doesn't care about your SBR either way. The ATF approves you making guns in other states, so long as you apply to transport first, so they are happy as well. You have to jump through a bunch of hoops, but you still get your SBR without having to live in fear of a rogue AG. And we all lived happily ever after...

 

[308]

I'm not from Washington but my Revokable Living Trust created via Quicken has been used 3X for NFA transfers.

 

[cpy911]

Quicken Trust does the job. I have two approved Form1's and got two more and a Form4 in the works.

I had to buy an older version off eBay that came on a CD. Was $7 shipped.

Thousands of these trusts have been approved.

 

[jekbrown]

for what it's worth, the makers of quicken have specifically stated that they don't recommend their trusts be used for this purpose. That may be because they are liberal douches that don't want to be associated with guns, or it could be for a very good legal reason. I don't know. I do know that the ATF has approved many stamps for people who have used quicken trusts.....but the problem with relying on that as evidence that the trust is 'good' is that getting ATF approval involves minimal examination of the document. They have a few things they require, they check to make sure those are in there, and they approve its use. That doesn't mean it'll be iron clad in court, which is where it really needs to be. "yeah, but the ATF issued me a stamp!" is not a legal defense...

 

[cpy911]

Actually, paying for and having the stamp is what is required for a law that is actually housed in the tax code. Why, the 2nd amendment does not allow for these anti gun laws so they rolled these laws under the tax code. Don't pay your taxes and you know the result....

Whatever requirements are met, however minimal to obtain an approved tax stamp is sufficient to meet the tax law. Basically, pay your taxes or be punished. The whole law is under the IRS tax code where the income tax stuff is. What would it matter in the manner (trust, no trust, quicken trust) you pay the tax? If you pay the tax as prescribed, you are fine. If you read the law itself it is pretty explanatory and clear. I don't understand all the concern about the mechanism used to pay your tax? I also use Turbotax to pay my taxes. Is that good enough? Should I pay a lawyer or attorney instead? I am sure they would offer their services if you so desire and even try and convince you that you should use them or else you may run into problems. Your choice.

So long as you pay the full tax, you are good to go.

Note that the term "Firearm" is defined here
http://www.law.cornell.edu/uscode/text/26/5845

U.S. Code › Title 26 › Subtitle E › Chapter 53 › Subchapter A › Part II › § 5811

(a) Rate
There shall be levied, collected, and paid on firearms transferred a tax at the rate of $200 for each firearm transferred, except, the transfer tax on any firearm classified as any other weapon under section 5845 <broken link removed> shall be at the rate of $5 for each such firearm transferred.
(b) By whom paid
The tax imposed by subsection (a) of this section shall be paid by the transferor.
(c) Payment
The tax imposed by subsection (a) of this section shall be payable by the appropriate stamps prescribed for payment by the Secretary.

for what it's worth, the makers of quicken have specifically stated that they don't recommend their trusts be used for this purpose. That may be because they are liberal douches that don't want to be associated with guns, or it could be for a very good legal reason. I don't know. I do know that the ATF has approved many stamps for people who have used quicken trusts.....but the problem with relying on that as evidence that the trust is 'good' is that getting ATF approval involves minimal examination of the document. They have a few things they require, they check to make sure those are in there, and they approve its use. That doesn't mean it'll be iron clad in court, which is where it really needs to be. "yeah, but the ATF issued me a stamp!" is not a legal defense...

 

[jekbrown]

I don't understand all the concern about the mechanism used to pay your tax? I also use Turbotax to pay my taxes. Is that good enough? Should I pay a lawyer or attorney instead? I am sure they would offer their services if you so desire and even try and convince you that you should use them or else you may run into problems. Your choice.

This. You CAN use Turbotax...but if the IRS finds that Turbotax screwed up, you can't blame it on the makers of Turbotax. Oh, you can try...but it won't matter in court. There was a case, which I can't find on google right now, where a guy asked for, and received specific instructions on how to do something on his income tax forms directly from the IRS. They told him to do "abc"...and he did "abc"...and the IRS came back on him later for tax evasion, even though they fully admitted that they told him to do his taxes incorrectly. Courts found they guy guilty, essentially saying that following bad advice from the IRS was no defense. I would look at a trust with NFA items through those crap-tinted glasses. Others can use a trust written in crayon on a bar napkin for all I care. No skin of my hieney...but I'll use a lawyer drafted one myself. Minimal cost relative to the reward.

 

[cpy911]

Your choice. Lawyers win on this one.

 

[cbzdel]

NW Gun Law Group is simultaneously possibly 'right' and possibly 'wrong'. The fact is, right now, no one knows how the AG will interpret the bill that legalized SBRs in WA. It is entirely possible that the AG will come back and say that 'making' is a no-go...which means using a form 1 to make an SBR in Washington would be illegal. On the other hand, the most important 2 words in the sentence above is "in Washington". There is no question that the law legalizes both possession and transportation of SBRs. There is also no question that the BATFE allows people who have been approved for a form 1 to get help making their firearm from a person/biz in another state. All you have to do is fill out a 5320.20, get it approved, and you're good to go to make your SBR in OR, ID, or whatever state you put down on the 5320.20. So, the process is:

1. buy lower, or rifle, or pistol that will become the SBR
2. get a trust
3. get trust notarized
4. submit form 1 / trust to the ATF, preferably via eforms (much faster)
5. received approved form 1
6. submit 5320.20
7. engrave lower/pistol/rifle
8. receive approved 5320.20
9. drive to whatever out of state location you put down on your form 5320.20
10. make your sbr
11. transport said SBR back to your home in WA.

Done. Washington can't ban SBR making in OR, no matter what the AG says. OR doesn't care about your SBR either way. The ATF approves you making guns in other states, so long as you apply to transport first, so they are happy as well. You have to jump through a bunch of hoops, but you still get your SBR without having to live in fear of a rogue AG. And we all lived happily ever after...

I read that the ATF will no longer approve any Form 1's within Washington State until this issue is sorted out, so would this method actually work anymore? Seems like if you could get a form 1 approved the "making" portion would never be the issue. My understanding is more along the lines of getting the Form 1 approved in the first place.

 

[jekbrown]

People have been "hearing" that pretty much since the day they became legal. A quick scan of NFAtracker shows that someone in WA got a Form 1 approved on Nov 3rd. I submitted my 4th Form 1 on October 16th....via eforms, so it should serve as a good example of whether or not WA F1s are still being approved. I expect an approval any day now. My other 3 were approved on 9/12.

 

[jekbrown]

update: dude on barfcom was approved on 11/12. Looks like the BATFE missed the memo about withholding WA F1s...

<broken link removed>

 

[cpy911]

Just had two more Form1 tax stamps come back approved. I used my quicken trust which now has multiple Form1 items on it. Works fine and I have no concerns about it.

With regards to IRS finding out that Turbotax screws up paying taxes, that could be valid. However, if their software made the error, they could be sued for liability. If the guy made up some numbers, then fault is on him.

However, it is straight forward in paying the $200 NFA tax. It was a one time payment that required no software to calculate. I have all the transaction history to prove I paid it. It was paid in full and done. I now have a stamp to prove it.

Repeating: Whatever requirements are met, however minimal to obtain an approved tax stamp is sufficient to meet the tax law. Basically, pay your taxes or be punished. The whole law is under the IRS tax code where the income tax stuff is. I paid my taxes and I am good to go. See U.S. Code › Title 26 › Subtitle E › Chapter 53 › Subchapter A › Part II › § 5811
Done deal.

Why would ATF or IRS come after me for using my trust that was not drafted by a lawyer? Mine is legally binding and was just re-recognized as sufficient to pay the tax and receive a stamp.

Also, Turbotax offers full audit protection and guarantees. Can you give a case number of the guy who used Turbotax and got convicted? I would like to see the retails of it. I suspect more is going on than what you may have been privy to.

This. You CAN use Turbotax...but if the IRS finds that Turbotax screwed up, you can't blame it on the makers of Turbotax. Oh, you can try...but it won't matter in court. There was a case, which I can't find on google right now, where a guy asked for, and received specific instructions on how to do something on his income tax forms directly from the IRS. They told him to do "abc"...and he did "abc"...and the IRS came back on him later for tax evasion, even though they fully admitted that they told him to do his taxes incorrectly. Courts found they guy guilty, essentially saying that following bad advice from the IRS was no defense. I would look at a trust with NFA items through those crap-tinted glasses. Others can use a trust written in crayon on a bar napkin for all I care. No skin of my hieney...but I'll use a lawyer drafted one myself. Minimal cost relative to the reward.

 

[jekbrown]

I'd be less concerned about being busted for tax evasion on the stamp than I would be the trust being found invalid under some nuance of state law. The examiners aren't legal experts on anything other than NFA law (and even that is debatable...), so like I mentioned previously, they check for a few specific things in the trust and, presuming they find them and you otherwise qualify, they issue a stamp. That is not a government guarantee that the trust is valid in its entirety. ATF/NFA taxes are not the only basis that a trust could be junk.

All of that said, you'll probably have no problems with quicken, I just wouldn't use it myself because "probably" isn't good enough for me. I've got a very detailed and lawyered up trust, it's almost 50 pages long so that it covers alllllll the ins and outs of fed/state law. It cost $, but that's fine with me. YMMV.

 

[cpy911]

What state laws affect NFA acquisitions and transfers? Have you researched this?
How does the state control how a federal tax is paid?

Direct From the tax code (which is where these laws are):
U.S. Code › Title 26 › Subtitle E › Chapter 53 › Subchapter A › Part II › § 5811
(a) Rate
There shall be levied, collected, and paid on firearms transferred a tax at the rate of $200 for each firearm transferred, except, the transfer tax on any firearm classified as any other weapon under section 5845 <broken link removed> shall be at the rate of $5 for each such firearm transferred.

Bottom line, I have paid my taxes, received the appropriate ATF tax "stamp" and am legal to own and operate my suppressors. Why would there be a problem with how I paid my tax in full? Why would a legally valid trust that I created from a template be invalidated? It is a legal document that is notarized. How can a trust that is legal one day be deemed not valid the next? Who deems a trust that you legally created for yourself invalid? What jurisdiction? (By the way, it IS perfectly legal to create your own legally binding trust, but not for others, that is practicing law without a license.)

The trust I own is a living trust and I can make updates and changes to it as needs and circumstances change, that is the point of it. It is a legal document. Why would it be junk? Who would deem it junk?

If you read the actual NFA law, which I have done myself, it is actually fairly straightforward once you get past all the definitions. (My favorite is that a Silencer is a Firearm that is controlled by the NFA). It is part of the tax code only. It is not part of a special separate firearms set of controls and laws. The NFA was a way for those who wanted to take away 2nd amendment rights by putting high taxes on certain items and requiring registration of said items. Silencers happen to be on that list.

Bottom line, pay the tax to own the item or be subject the penalties for not paying the tax. There is nothing in the NFA laws talking about how to pay the tax. Payment is received by the ATF and they approved the paperwork I have submitted them. Like I said, they just approved two Form1 applications I gave them and returned tax stamp backs. In my case, I believe the law is on my side as I have complied with U.S. Code › Title 26 › Subtitle E › Chapter 53 › Subchapter A › Part II › § 5811 in any case. That is the extent of the law in question.

I'd be less concerned about being busted for tax evasion on the stamp than I would be the trust being found invalid under some nuance of state law. The examiners aren't legal experts on anything other than NFA law (and even that is debatable...), so like I mentioned previously, they check for a few specific things in the trust and, presuming they find them and you otherwise qualify, they issue a stamp. That is not a government guarantee that the trust is valid in its entirety. ATF/NFA taxes are not the only basis that a trust could be junk.

All of that said, you'll probably have no problems with quicken, I just wouldn't use it myself because "probably" isn't good enough for me. I've got a very detailed and lawyered up trust, it's almost 50 pages long so that it covers alllllll the ins and outs of fed/state law. It cost $, but that's fine with me. YMMV.

 

[jekbrown]

coulda saved yourself a lot of typing by just posting this...

Why would a legally valid trust that I created from a template be invalidated?

"legally valid" is the entire story here. What's required for a valid trust? It has nothing to do with NFA law. Could you use a crayon and write on a napkin "I, joe blow, started the Joe Blow NFA Trust, it owns the items on the schedule A. The End" and have a valid trust? Perhaps a better question is, if there really are no requirements, why did you use Quicken? why not just knock something out in Word? What does Quicken know that you don't? Trusts can and have been invalidated before. Why? Do a google search for quicken NFA trust and you'll find lots of reasons why they may not work for everyone. If it works for you, I'm happy for you. Knock yourself out. The good news is, we live in a free country, we can all spend our $ how we choose, and Quicken may not work for everyone. I certainly wouldn't be enthused about a product whose own manufacturer specifically tells me not to use it for that purpose. My guess is, they smell legal liability issues and want no part of that market...but who knows what their reasoning is. What I do know is that if the maker says "don't do it!" it might be wise to listen before you feed your cat some antifreeze--they may know their own product better than a consumer does.

This site is Arizona-related. Yes, the people who run it are trying to sell gun trusts, so all should be taken with a grain of salt...but what it does do is provide a good list of trust requirements for that state and ways in which people can easily run afoul of them. Doing so invalidates the trust, whether the ATF initially recognizes it or not....

http://www.keytlaw.com/arizonawills/do-it-yourself-gun-trust-mistakes/

specific example of a quicken trust fail that was NOT detected by the feds initially...

http://www.guntrustlawyer.com/2009/05/batfe-seeks-to-seize-nfa-firea.html