Options As to How to Take Title of an NFA Device
The classic way to take title of an NFA device (machine gun, silencer, short barreled rifle or shotgun, cannon etc.) is as an individual. We hasten to make clear that there is nothing wrong with taking title as an individual. As in all NFA transactions other than from dealer to dealer there is a $200 transfer tax — once for life. However, upon the death of the owner of a NFA device the NFA device does transfer to the heir of the decedent tax-free.
There are, however, other ways to take title of an NFA device; e.g., In the name of a corporation, LLC or a trust. Indeed, there are certain advantages associated with taking title other than in an individual’s name.
If other family members also enjoy shooting, consider setting up a family corporation, in which other family members are officers. Then the corporation can legally purchase the machine gun or other NFA device, and the corporation’s board of directors can pass a resolution authorizing any corporate officer(s) to possess the machine gun or other NFA device. That way, you avoid the problems of it ever being in another’s possession without authorization. (With individual ownership, it’s technically illegal for anyone else to even have the combination or key to a safe in which it is stored. No one but the owner must ever have access to it).
Incorporating or using a trust also does away with the CLEO signoff, fingerprints, photos, etc. You just find what you want, buy it, and send in the Form 4 application along with $200 and a copy of your articles of incorporation. Then wait for approval –– which comes quicker, because you don’t have to wait for the FBI to run your fingerprints (a large part of the delay). However, President Obama has instituted a Notice of Proposed Rulemaking pursuant to which the CLEO signoff, fingerprints, photos, etc. would be extended to trusts, corporations and other entities which until now have been exempt. No one knows what the end point of this proposed rulemaking will be nor when it might go into effect. However, most people believe the most probable time frame is the summer of 2014.
You have no fewer rights having a machine gun or other NFA device than any other firearm, just a lot more responsibilities to keep legal. You have a severely restricted item, which cannot be lent to anyone, nor sold or even transported across State lines (with few exceptions) without prior Federal approval or notification.
The Feds cannot make an inspection of your home without a search warrant just because you are a lawful machine gun or other NFA device owner.
The hardest part of the NFA transfer process is sometimes getting your CLEO signature.
Unfortunately, many CLEOs and other approved officials won’t sign, often because they are misinformed as to what they are signing, or for political reasons.
Some only sign for friends or for political favors. Unfortunately this is not illegal; it just shows how much this requirement is abused. If your CLEO won’t sign, BATF has a list of other acceptable signers, such as district attorneys and certain judges. But if you can’t get anyone on the list to sign, your only alternative — at least until the rules are changed — may be the corporate or trust route which for the reasons set forth above isn’t a bad alternative.