FFLs are facing a regulatory environment that is unlike any in recent memory.  Having been in the firearm industry since 1994, I can confidently say the action being taken against FFLs by the ATF is unprecedented.

According to ATF, revocations currently number over 270 since October of 2021. In the same 9+ month time frame of a “normal” year, ATF would have taken revocation action against 40 or so dealers. Why such an increase?  You can look directly to the current Administration’s commitment to target “Rogue” FFL Dealers who intentionally violate the law.  The problem is these revocations aren’t targeting ONLY rogue dealers that intentionally and willfully violate the federal regulations.  Many of these revocations have even been initiated for clerical errors on 4473s, and many are from previously closed inspections from several months prior.

Concerns over these revocations have reached ranking members of Congress’ radar. In June of this year, 25 Members of Congress sent a letter to ATF, demanding an explanation for the skyrocketing revocation proceedings based on “minor infractions” alleged in previously closed inspections.  The letter noted that the businesses had fully resolved the issues at or before the time of the prior inspection and had no new infractions cited between the inspection and the notice of revocation.  Congress has raised their eyebrows at the direction of these inspections and so should you. There is a lot more in that letter that would give you pause, but the underlying message is clear: the compliance health of your FFL has never been more important, nor has it ever been more in question.  The thought process that “my last ATF inspection wasn’t bad, so we are ok” has gone right out the window.

ATF has twice, in the past several months, taken time to speak at industry events to discuss what they consider to be the five key violations that will cause you to have your license revoked.  Remember, this is from ATF, not industry and as you can see from the above, these “5 Deadly Sins” as they have become known, may not be the only thing that causes your FFL issues.  Just know, that these 5 absolutely WILL cause you issues.

According to ATF executive leadership who spoke at Orchid Advisors FIC (in Atlanta in April) and at NSSF Retail and Range EXPO (in New Orleans in July) these are the 5 things that will cause a revocation letter to be sent to your FFL:

  1. Transferring a firearm to a prohibited person.
  2. Failing to conduct a required background check.
  3. Falsifying records, such as a Firearm Transaction Form (the ATF F 4473)
  4. Failing to respond to a trace request.
  5. Refusing to permit ATF to conduct an inspection.

Transferring a firearm to a prohibited person.

Notice there is no terminology such as intentional or purposeful, etc.  “Willful” does not mean “intentional” and FFLs should be aware of the distinction between the two. In this environment, paper 4473s present the highest level of risk for error.  There are numerous e4473 and eBound Book software providers, such as FastBound, Orchid eBound, EZ Arms Keeper, Rapid POS, and others in the industry that significantly reduce the likelihood of the first 3 Zero-Tolerance violations. The top software solutions in the market provide digital guardrails to keep your customers and your employees from making critical mistakes that could lead to potential issues, such as transferring a firearm to a prohibited person without a background check or an employee anonymously falsifying 4473s in your store. 

These safeguards typically include stopping the sale if a customer indicates they are prohibited on the 4473, requiring a NICS/POC check to be completed and recorded on the 4473, requiring a state issued permit that exempts the NICS check requirement, and ensuring the serial and regulatory data from your bound book correctly populates to the 4473 itself.  These simple “catches” are easily missed when using paper 4473s.  Even if you do a background check on the customer and they receive a proceed response from NICS, but the customer marked that they are, for arguments sake, an “unlawful user of, or addicted to, marijuana”, and the transfer takes place, a violation has occurred.  The NICS proceed response isn’t relevant. You had reason to believe the customer was prohibited by their answers on the 4473.  This is just one example of the innumerable possible scenarios that can take place at your gun counter daily.  It is 2022 and given the current environment FFLs are operating in, there is no logical reason to not mitigate your risk with technology.

Failing to conduct a required background check.

If you are using paper, and are now considering a move to digital or an electronic 4473 and Bound Book but don’t know where to start?  We have some good news for you.  We did the initial leg work for you in a previous blog post.  Simply click here to review. 

Failing to respond to a trace request.

In number 4 above, completing an ATF trace, per 27 CFR 478.25a, is required to be done within 24 hours of notification from the ATF. This can be a phone call or via email.  Email is now the most common but, regardless of how ATF contacts you to complete a trace, it is imperative that it is completed immediately.  This means looking in your Bound Book, finding out who it was transferred to, finding that 4473 and, when needed, scanning and emailing a copy of that 4473 to the ATF NTC (National Tracing Center).  Knowing you have up to 20+ years of records on site, this task could be daunting.  We also know that on August 24th , that 20-year requirement sunsets and you must keep all 4473s that are “started” in your store, for the life of your FFL.  More paper, more banker’s boxes collecting dust in your back room or gun vault, and more time spent finding the one 4473 requested by the ATF.

Technology is also able to help your business with completing these traces faster than ever.  Digital storage of 4473s is the next step in fully digitizing your FFL’s operations.  Currently, ATF must approve a variance request allowing you to store your 4473 in electronic format.  On August 24th, 2022, that will all change with a new ATF Ruling that will govern electronic storage of 4473s.  This ruling will also allow for legacy records, within certain parameters that ATF will define in the ruling, to be scanned into digital storage.  All that paper taking up room in your facility could be gone sooner than you think!  4473 Cloud works with ALL e4473 software available in the marketplace today and we are integrated with the industry’s leading solution providers to offer the most seamless solution for your business. You can be using 4473 Cloud today and get the ATF’s required 60-day notification started immediately.

Refusing to permit ATF to conduct an inspection.

Finally, with regard to the “5th deadly sin,” if the ATF shows up during working business hours to conduct an inspection and they have not done so in the previous year, you are required to allow them to do their inspection (per 27 CFR 478.23).  Simply put, let them do the inspection. 

The moral of the story is, to get your business into the 21st century, let technology help your company’s compliance, mitigate your risk and allow you, as an owner or Responsible Person of your FFL, to sleep better knowing you have significant safeguards against these 5 violations with a click of a button.  Do your research and ensure the software you are using meets the ATF’s minimum requirements and get started today.  Don’t let an honest mistake or an oversight by one of your employees cost your business its FFL. 

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Travis Glover Aug. 8th, 2022

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