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Old December 20, 2011, 05:40 PM   #1
jag2
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C&R audit?

I see a lot of questions about this and that on C&R licenses that seem pretty anal and I agree that dealing with any govt. agency may make one paranoid, but worrying about do I put such and such on line 5 or line 6 seems a bit much. So my question is, does anyone have first hand knowledge (not I heard of a guy, etc) of someone actually be audited or reviewed by the BATF. I guess there may be some scenario which would raise some questions but I can't imagine they really have time to waste by reviewing every entry in your bound book (mine is loose leaf, oh dear). Just wondering, and I'm not suggesting anyone ignore the rules.
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Old December 20, 2011, 06:47 PM   #2
firewrench044
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My brother inlaw

4 years before he got his C&R one of his pistols was stolen, then used
in a robery ( the pistol was police issue and trasfered to him on his
retirement = paper trail )
so when he appied for his C&R the computor flagged him, and he was
audited when they could get to it (low priority )( 8 months after he
received his C&R )
he had to produce all C&R guns and paper work had to be in order
the ATF agent even helped him straigten out his paper work
after the audit he brought the agent to see two of my guns that he had
never seen but had only herd of ( we live 2 blocks away from each other )

so do not worry about an audit, just keep all paper work in order
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Old December 20, 2011, 07:14 PM   #3
leadchucker
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Quote:
I can't imagine they really have time to waste by reviewing every entry in your bound book
It's a government agency. They'll waste all the time they need to.
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Old December 20, 2011, 08:36 PM   #4
Cheapshooter
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Rare, but they do happen. Usually when they suspect something illegal is being done.
10+ years with a C&R, and no audits from them. I guess I'll be getting one now!
Probably not, 30 or so acquisitions, haven't counted lately, and only two dispositions. I don't think they would suspect I'm acting as a dealer.
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Old December 21, 2011, 08:18 AM   #5
madcratebuilder
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A audit is pretty unlikely unless your name gets flagged for some reason. Just keep your C&R entries up to date, they well not crucify you for a honest mistake.
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Old December 21, 2011, 09:43 AM   #6
Cheapshooter
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Quote:
(not I heard of a guy, etc)
Don't know if you consider this hearsay, but on another forum dedicated to C&R there have been posts stating that for an audit the agent just wanted to see the bound book. The licensee was able to make an appointment at the BATF agents office to show him the book without even showing him the guns listed.
Still, only an internet post, but I don't think it's a big deal if you keep everything on the up and up....For now anyway! Who knows what the future could bring with the up coming election?
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Old December 21, 2011, 10:12 AM   #7
amx4080
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I'm on my third license, and I've never been audited or even contacted. I keep my paperwork up to date and honest, so no worries even if I was called.

When folks I'm talking to ask about the C&R, most are really worried that if you have a C&R you'd be the first to have your guns confiscated if it ever really comes to that. My answer is to stop being paranoid, because if it ever really comes to that, we've all got much bigger problems to deal with.

The C&R is a great tool. Fill out the paperwork, send the BATFE $30.00 and a few weeks to months later you get a piece of paper that lets you make a phone call, order a firearm and a few days after that the Big Brown Truck pulls up and give you another toy. It's awesome.
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Old December 21, 2011, 01:10 PM   #8
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amx,

that's an interesting point about the confiscation fear while having a c & r. I agree it might be paranoia but also because I don't feel this govt would ever be successful with a wholesale confiscation like what they did in england, unless they were to whittle down our numbers to a point to where they could pick small groups and make examples of them. short of that in my opinion we could only hope they would try a complete confiscation strategy. it might be the only thing that could unite us in such a selfish society. but the govt is not that stupid and they understand human nature. sort of off topic i'm sure.
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Old December 21, 2011, 03:26 PM   #9
leadchucker
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Legal C&R acquisitions made by you, regardless of whether they were made within the guidelines of a C&R license or not, are very likely traceable to you. The only firearms that do not have a paper trail leading to you, are firearms you buy anonymously, such as in the parking lot of a gun show.
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Old December 21, 2011, 06:35 PM   #10
amx4080
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lagavulin62,

I agree, the fear that a C&R holder would be singled out somehow is paranoia. It's the best tool for collecting and a hell of a deal for a little paperwork. But, as has been said, fear and ignorance go hand in hand.

Way off-topic, but the English situation is awful. Next, they'll try to ban kitchen knives. Makes me wonder if the riots that happened last year would have had a difference outcome if a good portion of the population was armed. The supporters of concealed carry always point out that crime goes down as gun ownership goes up. Maybe gun ownership in the U.S.A. why nobody is trying to occupy my front yard?
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Old December 21, 2011, 08:24 PM   #11
James K
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I think it is extremely unlikely that a C&R holder will be audited. Some red flags, FWIW. Buying large quantities of guns, especially handguns, under your C&R. Buying a couple of guns to pick the best is OK, but buying 5000 guns to arm the local mafia or your friendly militia is going to raise alarms.

Another red flag is having a gun you bought under your license turn up at a crime scene or in the hands of some guy on parole for serial bank robbery.

If you play by the rules (and don't try to push the envelope to see what you can get away with), you should have nothing to worry about.

Note that since a C&R holder is assumed to carry on his collecting activity from his house, not a public place of business, any search will require a warrant. They can inspect your book, but you can also say that you will bring them the book at their office.

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Old December 30, 2011, 04:28 AM   #12
'courte
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Quote:
Note that since a C&R holder is assumed to carry on his collecting activity from his house, not a public place of business, any search will require a warrant.
Is there a ruling that allows them to do that? I've always wondered if there was ever a fight over what constitutes reasonable search for a regulatory agency.
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Old December 30, 2011, 11:23 AM   #13
dogtown tom
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Quote:
firewrench044 ...so when he appied for his C&R the computor flagged him, and he was audited when they could get to it (low priority )( 8 months after he received his C&R )...
I would bet the "flag"(whatever that means) and the audit are two distinctly different unrelated events. ATF doesn't give you eight months notice of a compliance inspection.

Quote:
he had to produce all C&R guns and paper work had to be in order...
There is no requirement for an 03FFL to even let ATF in the front door. ATF regs clearly allow for the C&R licensee to bring his bound book only to the local ATF office for the compliance inspection.

Quote:
amx4080 ...When folks I'm talking to ask about the C&R, most are really worried that if you have a C&R you'd be the first to have your guns confiscated if it ever really comes to that. My answer is to stop being paranoid, because if it ever really comes to that, we've all got much bigger problems to deal with.
This.


Quote:
'courte
Quote:
Quote:
Note that since a C&R holder is assumed to carry on his collecting activity from his house, not a public place of business, any search will require a warrant.
Is there a ruling that allows them to do that? I've always wondered if there was ever a fight over what constitutes reasonable search for a regulatory agency.
When you apply for any Federal Firearms License you agree in your application that you will allow ATF to conduct inspections or audits to insure compliance with Federal law. C&R licensees differ in that they can do they audit at the ATF office. All other FFL compliance inspections are done only at the licensed premises.

A search warrant is needed if ATF has cause to believe a crime has been committed and can convince a judge of that. Whether the collecting activity occurs at the licensees home or a place of business has no bearing on the search warrant.....ATF will get a search warrant to cover every location where they suspect criminal activity has occured.

A compliance inspection or audit is NOT a search of the licensees sock drawer. For a C&R all they can require you to show them is your bound book. If you get snooty with them and they discover ANY errors...remember that ATF considers ANY and ALL errors or ommissions as "willful" violations. whether the IOI will write up your mistakes as a violation is his choice.

At my last compliance inspection the IOI took great interest in those persons who acquired multiple firearms on the same day....didn't matter if they had a C&R or not. Since he cannot take the actual 4473's i had to make copies of those transactions.

So to those C&R's who think they fly under the ATF radar when they buy a dozen Mosin Nagants in one transaction, keep only the nicest one and sell the rest......ATF knows and keeps records. (so be careful that you don't run the risk of dealing with out an 01FFL)
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Old December 30, 2011, 09:10 PM   #14
leadchucker
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I had assumed that the ATF might want to verify serial numbers and such, and therefore they would want to actually look at your firearms, and not just the bound book. This might be especially true if they found discrepancies in your bound book. Wrong?
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Old December 30, 2011, 09:38 PM   #15
emcon5
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Quote:
So to those C&R's who think they fly under the ATF radar when they buy a dozen Mosin Nagants in one transaction, keep only the nicest one and sell the rest......ATF knows and keeps records. (so be careful that you don't run the risk of dealing with out an 01FFL)
I would never do such a thing, but how would ATF do this? There is no reporting requirement for multiple rifle sales for FFL to FFL transfers that I have ever heard of, the only record would be in the wholesaler's bound book, which only goes to ATF if the FFL closes.

I suppose an ATF Agent could notice during a regular audit of the distributor, but considering how many guns the bigger shops move, that would be like a needle in a haystack.
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Old December 30, 2011, 10:10 PM   #16
dogtown tom
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Quote:
leadchucker I had assumed that the ATF might want to verify serial numbers and such, and therefore they would want to actually look at your firearms, and not just the bound book. This might be especially true if they found discrepancies in your bound book. Wrong?
For some reason Federal law does not require ATF to verify guns vs. bound book entries. All that is required for an audit of a C&R is your bound book itself.


Quote:
emcon5 I would never do such a thing, but how would ATF do this? There is no reporting requirement for multiple rifle sales for FFL to FFL transfers that I have ever heard of, the only record would be in the wholesaler's bound book, which only goes to ATF if the FFL closes.
During a compliance inspection the ATF IOI will review bound book entries. Its pretty obvious when my bound book shows multiple dispositions going to the same customer on the same day. You might get lucky and the IOI not notice or not care. I wouldn't wat to risk the IOI who's looking for Brownie points.


Quote:
I suppose an ATF Agent could notice during a regular audit of the distributor, but considering how many guns the bigger shops move, that would be like a needle in a haystack.
I had my first compliance inspection in three years last September....the IOI found the transaction involving the twelve Mosins in about four minutes. It's pretty easy since multiple entries of the same firearm appear one right after the other. All he had to do was thumb through about sixty pages and oops there it is.

I did one transaction of 100 stripped AR lowers to a single customer (ATF is sending him a "you better not be dealing in firearms" letter) He inherited quite a sum of cash from his grandmother and a friend advised him to invest in AR lowers since Obama was going to outlaw them. (that boat sailed in 2009) The guy paid around $63 each for those lowers plus shipping.........Palmetto State Armory is selling them this past week for under $50. Some friend
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Old December 30, 2011, 10:46 PM   #17
James K
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Hi, 'courte,

"Is there a ruling that allows them to do that? I've always wondered if there was ever a fight over what constitutes reasonable search for a regulatory agency."

Well, a regulatory agency almost by definition is a law enforcement agency, since it is given its tasking under some law or other and charged with enforcing it. And a LEA is certainly able to request and obtain a search warrant where it has probable cause to believe that someone is in violation of the law. (Non-gun example: the FCC can obtain a warrant if it has probable cause to believe someone in a home is operating an unlicensed radio transmitter.)

I doubt anyone, except possibly the more extreme Libertarians, would say that a LEA should not be able to conduct reasonable searches under a warrant; their "right" to do so is in the Constitution itself.

Jim
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Old December 31, 2011, 10:24 PM   #18
j-framer
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dogtown tom,

You have stated that, in the event of an audit, a C&R licensee is not required (upon request of the ATF) to submit his firearms for examination - only his bound book.

How do you reconcile this claim with the below quote from ATF Publication 5300.11, revised December 2007, page 3 (emphasis is mine)?

Quote:
SS 478.23 Right of entry and examination. (a) [A]ny ATF officer, when there is reasonable cause to believe a violation of the Act has occurred and that evidence of the violation may be found on the premises of any licensed manufacturer, licensed importer, licensed dealer, or licensed collector, may, upon demonstrating such cause before a Federal magistrate and obtaining from the magistrate a warrant authorizing entry, enter during business hours (or, in the case of a licensed collector, the hours of operation) the premises, including places of storage, of any such licensee for the purpose of inspecting or examining:

1) Any records or documents required to be kept by such licensee under this part and

2) Any inventory of firearms or ammunition kept or stored by any licensed manufacturer, licensed importer, or licensed dealer at such premises or any firearms Curios or Relics or ammunition kept or stored by any licensed collector at such premises.

c) Any ATF officer, without having reasonable cause to believe a violation of the Act has occurred or that evidence of the violation may be found and without demonstrating such cause before a Federal magistrate or obtaining from the magistrate a warrant authorizing entry, may enter during the hours of operation the premises, including places of storage, of any licensed collector for the purpose of inspecting or examining the records, documents, firearms, and ammunition referred to in paragraph (a) of this section (1) for ensuring compliance with the record-keeping requirements of this part not more than once during any 12-month period or (2) when such inspection or examination may be required for determining the disposition of one or more particular firearms in the course of a bona fide criminal investigation. At the election of the licensed collector, the annual inspection permitted by this paragraph shall be performed at the ATF office responsible for conducting such inspection in the closest proximity to the collector's premises.
The above clearly allows for the inspection to take place at the ATF office instead of the collector's home (premises). Nowhere, however, does it exempt the collector from the requirement to submit his records and firearms for inspection on demand, whether the inspection takes place at his home or the ATF office. It is right there in the text, crystal clear.

The only explanation I can think of for your claim is that you may have a different version of this publication. Can you cite a source supporting your claim that a C&R licensee is not required to furnish his firearms for inspection on demand, regardless of where the inspection takes place?
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