Federal Firearms License (“FFL”) holders and Special Operational Taxpayers (“SOTs”), may be importers, exporters, manufacturers, and/or in the business selling over the counter at their retail shop or gun shows. Unless an inspection reveals missing firearms or other material operational issues with an FFL’s operations, the Bureau of Alcohol, Tobacco, Firearms and Explosives (“BATFE”) will conduct, at most, yearly compliance visits and audits.
Dealers FFL regulatory compliance issues are common, and many FFL holders run into trouble keeping track of current 4473 forms (or using an outdated FFL, which is also non-compliance), multiple handgun sales forms, an accurate bound book (or acquisition and disposition ledgers), and firearms themselves. Such failures impede AFTE’s law enforcement charge and may lead to an enforcement action, up to and including revoking the FFL. When non-compliance is an issue, this is where the prudent FFL holder will consider consulting with or retaining an FFL compliance attorney.
Therefore, upon failures with compliance, an audit, administrative hearing or other action by BATFE, the FFL may need counsel to demonstrate effective remedial measures to implement and be able to demonstrate how implementation is working to solve “paperwork” problems. In rare cases, an FFL holder’s failure to comply may lead to criminal action under state or federal, which also necessitates an FFL compliance attorney.
In a typical scenario, an FFL compliance lawyer will reach out to BATFE to determine what steps can be implemented and actions taken to mitigate administrative sanction, which can result in revocation of an FFL. The work of the Federal Firearms Licensee compliance lawyer may be vast, ranging from addressing zoning matters to local ordinances or helping the FFL wind up operations consistent with BAFTE requirements.
Ultimately, the goal of a FFL compliance lawyer for the FFL/SOT is strict compliance, which means there is no room for error or failure to comply. BATFE expects strict compliance, and anything short, puts the FFL/SOT at risk of adverse action, including license revocation. In some cases, adverse action may rise to the “willful” level and result in a criminal charge under GCA or National Firearms Act (“NFA.”)
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