24 Senators Demand "Engaged in The Business of Selling Firearms" Defined by EO

[Bartholomew Roberts]

http://php.delawareonline.com/news/d...&include_pdf=1

24 Senators have written the President demanding that the phrase "engaged in the business of selling firearms" described in federal law be better defined in a specific manner serving their gun control goals. Prepare yourselves accordingly.

[doofus47]

"Whaaat?"
Um, do you have a business license?
No.
Ok, I guess you're not in business....
How hard is this?

I know that they're just stirring the pot and pandering, but sometimes stupid questions have really easy answers.

[dogtown tom]

doofus47 "Whaaat?"
Um, do you have a business license?
No.
Ok, I guess you're not in business....
How hard is this?

I know that they're just stirring the pot and pandering, but sometimes stupid questions have really easy answers.

A business license has nothing to do with whether someone is engaging in business.

I don't have a business license because neither the City of Plano or the State of Texas require one for gun dealers.

[kilimanjaro]

"Did you exchange a firearm for anything of tangible value, including, but not limited to, cash or promise of cash in any form, goods, services, or property, regardless of real or estimated value and notwithstanding any profit or loss, real or imagined?"

If "Yes", you are a dealer under their new interpretation. Welcome to the Orwellian Era.

[Tom Servo]

OK, so they didn't get their background check bill, and they're pressuring the President to change a legal definition via executive order. If I'm correct, he doesn't have the authority to do that.

It doesn't help that the current definition is so nebulous:

The term “dealer” is defined at 18 U.S.C. § 921(a)(11)(A) to include any person engaged in the business of selling firearms at wholesale or retail. The term “engaged in the business” as applied to a dealer in firearms means a person who devotes time, attention, and labor to dealing in firearms as a regular course of trade or business with the principal objective of livelihood and profit through the repetitive purchase and resale of firearms.

Of course, I'm still waiting for any evidence that background checks do anything to reduce violent crime.

[buckhorn_cortez]

It doesn't help that the current definition is so nebulous:

It seems fairly clear to me, especially, "...with the principal objective of livelihood and profit through the repetitive purchase and resale of firearms."

How, EXACTLY, would you word the definition to make it more clear?

[carguychris]

Originally Posted by buckhorn_cortez

It seems fairly clear to me, especially, "...with the principal objective of livelihood and profit through the repetitive purchase and resale of firearms."

The primary issue from an enforcement standpoint is that, in order to legally establish someone's objective, it is necessary to prove that person's intent. This is typically difficult.

A secondary issue is the inherent vagueness of the term "repetitive".

[Frank Ettin]

Originally Posted by buckhorn_cortez

It seems fairly clear to me, especially, "...with the principal objective of livelihood and profit through the repetitive purchase and resale of firearms."

How, EXACTLY, would you word the definition to make it more clear?

But that's not particularly clear in practice. Let's look at what the courts have said.

1. The Third Circuit, in upholding a conviction of dealing in firearms without a license noted (U.S. v. Tyson, 653 F.3d 192 (3rd Cir., 2011), at 200-201):

   ...By the statute's terms, then, a defendant engages in the business of dealing in firearms when his principal motivation is economic (i.e., “obtaining livelihood” and “profit”) and he pursues this objective through the repetitive purchase and resale of firearms. Palmieri, 21 F.3d at 1268 (stating that “economic interests” are the “principal purpose,” and “repetitiveness” is “the modus operandi ”). Although the quantity and frequency of sales are obviously a central concern, so also are (1) the location of the sales, (2) the conditions under which the sales occurred, (3) the defendant's behavior before, during, and after the sales, (4) the price charged for the weapons and the characteristics of the firearms sold, and (5) the intent of the seller at the time of the sales. Id. (explaining that “the finder of fact must examine the intent of the actor and all circumstances surrounding the acts alleged to constitute engaging in business”). As is often the case in such analyses, the importance of any one of these considerations is subject to the idiosyncratic nature of the fact pattern presented...

2. And the Fifth Circuit noted (United States v. Brenner (5th. Cir., 2012, No. 11-50432, slip opinion), at 5-6, emphasis added):

   ...the jury must examine all circumstances surrounding the transaction, without the aid of a "bright-line rule". United States v. Palmieri, 21 F.3d 1265, 1269 (3d Cir.), vacated on other grounds, 513 U.S. 957 (1994). Relevant circumstances include: "the quantity and frequency of sales"; the "location of the sales"; "conditions under which the sales occurred"; "defendant's behavior before, during, and after the sales"; "the price charged"; "the characteristics of the firearms sold"; and, "the intent of the seller at the time of the sales". Tyson, 653 F.3d at 201.

3. The Sixth Circuit noted (United States v. Gray (6th Cir., 2012, No. 11-1305, slip opinion), at 8, emphasis added):

   ...However, "a defendant need not deal in firearms as his primary business for conviction." United States v. Manthey, 92 F. App'x 291, 297 (6th Cir. 2004)....

4. And in upholding Gray's conviction the Sixth Circuit also noted (Gray, at 8-9):

   ...We have previously held that evidence was sufficient to support a conviction under § 922(a)(1)(A) where it showed (1) that the defendant frequented flea markets and gun shows where he displayed and sold guns; (2) that the defendant offered to sell guns to confidential informants on multiple occasions and actually sold them three different guns on two different occasions; (3) and...that the defendant bought and sold guns for profit. See United States v. Orum, 106 F. App'x 972, 974 (6th Cir. 2004)...

5. In affirming a conviction of dealing in firearms without a license, the Ninth Circuit stated (U.S. v. Breier, 813 F.2d 212 (C.A.9 (Cal.), 1987), at 213-214, emphasis added):

   ...Courts have fashioned their own definitions of the term. For example, we have previously stated "that where transactions of sale, purchase or exchange of firearms are regularly entered into in expectation of profit, the conduct amounts to engaging in business." United States v. Van Buren, 593 F.2d 125, 126 (9th Cir.1979) (per curiam). In United States v. Wilmoth, 636 F.2d 123 (5th Cir. Unit A 1981), the Fifth Circuit stated that to prove the status of the accused as one engaged in the business of dealing in firearms, "the Government must show a greater degree of activity than the occasional sale of a hobbyist." Id. at 125. "It is enough to prove that the accused has guns on hand or is ready and able to procure them for the purpose of selling them from time to time to such persons as might be accepted as customers." Id.; accord United States v. Carter, 801 F.2d 78, 82 (2d Cir.), cert. denied, --- U.S. ----, 107 S.Ct. 657, 93 L.Ed.2d 712 (1986); United States v. Burgos, 720 F.2d 1520, 1527 n. 8 (11th Cir.1983)....

So someone who might in the course of collecting firearms cross some invisible line between being a "hobbyist" and being a "dealer" is unclear and could, if he's unlucky, wind up being a question for a jury.

It's doubtful that the applicable statutes give the President authority to clarify the question by executive order. However, ATF probably could through formal rule making. Whether that would be good or bad for us probably would depend on where they draw the line.

[chimo]

The current definition is perfectly clear.

The term “dealer” is defined at 18 U.S.C. § 921(a)(11)(A) to include any person engaged in the business of selling firearms at wholesale or retail. The term “engaged in the business” as applied to a dealer in firearms means a person who devotes time, attention, and labor to dealing in firearms as a regular course of trade or business with the principal objective of livelihood and profit through the repetitive purchase and resale of firearms.

They have to be very careful in changing the wording, lest they end up putting people who collect coins, baseball cards, stamps, etc. in the same "engaged in the business" boat. 14th Amendment applies, IMO.

[carguychris]

Originally Posted by chimo

The current definition is perfectly clear.

The definition may be clear, but the issue is demonstrating its applicability in court. Pay particular attention to item #2 is Frank Ettin's prior post.

Originally Posted by chimo

They have to be very careful in changing the wording, lest they end up putting people who collect coins, baseball cards, stamps, etc. in the same "engaged in the business" boat.

How do you figure?

18 U.S.C. § 921(a)(11)(A) speaks to the applicability of 18 U.S.C. § 923, which clearly applies solely to firearms and ammunition.

Originally Posted by 18 U.S.C. § 923

No person shall engage in the business of importing, manufacturing, or dealing in firearms, or importing or manufacturing ammunition, until he has filed an application with and received a license to do so from the Attorney General. The application shall be in such form and contain only that information necessary to determine eligibility for licensing as the Attorney General shall by regulation prescribe and shall include a photograph and fingerprints of the applicant...

(My emphasis in boldface)

[Frank Ettin]

Originally Posted by chimo

They have to be very careful in changing the wording, lest they end up putting people who collect coins, baseball cards, stamps, etc. in the same "engaged in the business" boat. 14th Amendment applies, IMO.

You don't need a federal license to be a dealer in coins, baseball cards, stamps, etc. The coin collector, baseball card collector, stamp collector, watch collector, etc., doesn't court federal licensing problems if he buys and sells, from time to time, the items he collects (he might have tax issues, however). The guy who collects guns does.

[Dreaming100Straight]

You don't need a federal license to be a dealer in coins, baseball cards, stamps, etc. The coin collector, baseball card collector, stamp collector, watch collector, etc., doesn't court federal licensing problems if he buys and sells, from time to time, the items he collects (he might have tax issues, however). The guy who collects guns does.

Frenk Ettin

I don't believe the need or lack of need is critical, but what is key is whether or not one might face criminal prosecution because of a statute's ambiguity. Can a filer be prosecuted for evasion (not mere avoidance) for deduction business costs, when the business is determined to be a mere hobby? If so, does the rule of lenity kick in?

[Frank Ettin]

Originally Posted by Dreaming100Straight

Frenk Ettin

I don't believe the need or lack of need is critical, but what is key is whether or not one might face criminal prosecution because of a statute's ambiguity. Can a filer be prosecuted for evasion (not mere avoidance) for deduction business costs, when the business is determined to be a mere hobby? If so, does the rule of lenity kick in?

What are you talking about?

At issue in this thread is the law which makes it a crime to be a dealer in firearms without the proper federal license. Because of the way in which the applicable law defines a dealer in firearms, it is not clear when someone who believes himself to be a hobbyist firearms collector, or is otherwise engaged in what he believes to be routine gun trading, is engaging in the business of being a dealer and thereby risks federal prosecution for being an unlicensed gun dealer.

People who might collect coins, stamps or other things don't need a federal license to be a dealer in those things. They therefore are never at risk of federal prosecution for dealing coins, stamps, etc., without a [unneeded and nonexistent] federal license.

The tax issues are something else entirely. The IRS has a lot of experience dealing with distinguishing between hobby income and business income, and it has some rather complex rules addressing the issue. Basically all income is taxable -- whether derived from hobby or business activities. The tax issues generally relate to permissible deductions and offsets.

[Dreaming100Straight]

Frank, Forget it. I just seemed to recall a case holding that because a violation of the tax code could lead to quasi criminal penalties, that the rule of lenity came into play. It may have not been a case over determining whether or not an activity was a hobby or a business pursuit and I agree that, since 923 provides definitions as to what it means by "engaged in the business" of various firearm related activities, that whatever is meant for tax purpose has no relevance, if any.

[johnwilliamson062]

Whether engaged "in the business" or not you are technically SUPPOSED to pay taxes on any income. Including cash value of trades.

[Frank Ettin]

Originally Posted by johnwilliamson062

Whether engaged "in the business" or not you are technically SUPPOSED to pay taxes on any income. Including cash value of trades.

That is absolutely true. The irony is that if you are a coin collector, a stamp collector, etc., it's advantageous from a tax perspective to qualify to be treated as a business by the IRS. But if you're a gun collector and qualify to be treated as a business by the IRS, you better have the appropriate FFL or you're likely to have some serious difficulties with the ATF

[ATN082268]

Originally Posted by Frank Ettin

It's doubtful that the applicable statutes give the President authority to clarify the question by executive order. However, ATF probably could through formal rule making. Whether that would be good or bad for us probably would depend on where they draw the line.

All a U.S. President has to do is appoint acting directors to whatever bureaucracies he wants to use to subvert the law by unelected bureaucrats who make more laws than elected officials...

[dogtown tom]

ATN082268 Quote:

All a U.S. President has to do is appoint acting directors to whatever bureaucracies he wants to use to subvert the law by unelected bureaucrats who make more laws than elected officials...

Really?
You do understand that the rulemaking authority of Federal agencies must be based on an actual Federal law?

The President can't "ban guns" and can't appoint an acting director who bans guns.

I dislike Obama...........but I dislike misinformation even more.

[44 AMP]

unelected bureaucrats who make more laws than elected officials...

It may seem like a minor point (and today in practical terms it is) but those unelected bureaucrats do not make LAW, they make regulations.

At one time, regulations were actually not the law. That changed, in practical, if not actual legal terms some time ago.

[kozak6]

This is an issue that's been stewing for years.

https://www.washingtonpost.com/polit...f92_story.html

Ending private transfers and requiring universal background checks is politically unviable at the federal level at this time.

So, to sidestep Congress and attack this issue executively, it's being proposed to redefine what it means to be “engaged in the business” by putting a hard number on it.

The number often brought up is 50 guns per year, which is a curiously large number.

It will be interesting to see where this goes.

[62coltnavy]

Kozak6 is entirely correct:the purpose is to require every gun sale to be accompanied by a background check. Every FFL (i.e. gun dealer) is required to run a background check, and so by defining any seller, licensed or not, as "being in the business", all sales require a background check.

This of course goes back to the nonsensical belief that background checks will somehow reduce the number of sales to prohibited persons by essentially eliminating private sales. That this is nonsensical is established by the fact most prohibited persons obtain firearms through illegal sales, whether they be private sales to known felons, straw purchases, street purchases or simple theft, and not through gun show sales (where most sellers are dealers any way). Further, the ATF rarely prosecutes straw buyers. Third, the bandied about statistic of "40 %" of gun show sales do not involve background checks is not supported by the original--and only--study on the subject performed back in 1994, which involved a small number of respondents and overlapped the enactment of the Brady Bill that first established the background check law. [The questionnaire asked only if respondents had obtained firearms without a background check, but not when or how, and thus included pre-Brady acquisitions as well as gifts, inheritances, and inter-familial transfers, as well as private sales, none of which required background checks before or after Brady.]

[johnwilliamson062]

Fifty seems pretty politically feasible to me. That is selling more than four guns a month every month. One a week. I don't think I have ever been acquainted with anyone who is that active. MAYBE someone I know with a 03 FFL, but I'll bet they are only at about half that, most of which is on their FFL anyways..

Is anyone acquainted with a person who is selling 50 guns a year and doesn't seem to be crossing the line?

On the plus side, they would then pretty much have to approve a 03 FFL for anyone making more than 50 sales a year or grant an exception, I think they would be on pretty soft ground legally. If I apply and indicate I will be making 50 purchases a year and they deny based on other factors how does that not go my way in court? Our way since I won't be the plaintiff and one of the legal support groups will be footing the bill. I could see a definition that is high like 50 being positive for us.

[buckhorn_cortez]

Fifty seems pretty politically feasible to me. That is selling more than four guns a month every month. One a week. I don't think I have ever been acquainted with anyone who is that active. MAYBE someone I know with a 03 FFL, but I'll bet they are only at about half that, most of which is on their FFL anyways..

Is anyone acquainted with a person who is selling 50 guns a year and doesn't seem to be crossing the line?

I wrote specifications for construction projects for nearly 30 years. Specifications become part of the contract between the Owner and Contractor, so, in effect, you are writing a legal document when you write specifications.

This means you have to be extremely careful how things are worded in specifications as you may end up in court litigating the outcome of what you've written.

The problem with putting an exact number on something is that people will use that number as the defined limit and creatively skirt the specification, law, or regulation.

In specifications, you try to use performance requirements rather than prescriptive requirements whenever possible. You try and limit the use of exact numbers unless the Contractor has to provide a specific amount (e.g. 10 computer workstations); or there is a performance requirement that involves a number (e.g. concrete shall be 4,000 psi after 28 days).

In the case of 50 guns, I wouldn't be the least bit surprised to find out (as an example) dad handled 49 guns, mom handled 49 guns, grandma handled 49 guns, etc. - all out of the same household during the year.

Nobody broke the law because no one handled 50+ guns, but it's quite obvious that a business was being run as 147 guns were passed through the household.

All you have to do is look at Obamacare as the illustration of the point. One of the measurement points for providing healthcare is when an employee works 30+ hours-per-week. Suddenly, many job descriptions became 29 hours-per-week.

If numbers worked really well in laws, then the Federal Government wouldn't have 75,000+ pages of tax law interpretations, and Obamacare wouldn't require the current 14,000+ pages of "clarifications" and interpretations.

The current gun law is based on performance criteria, "...with the principal objective of livelihood and profit through the repetitive purchase and resale of firearms."

Personal collecting doesn't involve the "principal objective of livelihood and profit..." while running a business does.

I will guarantee that putting a metric (number measurement) will NOT make a law better or clearer, it will only define the law avoidance point which people will creatively get around.

That's why I've asked the question - EXACTLY how would you word the regulation?

[kilimanjaro]

I think Mom and Dad, and the kids Susie and Chip, together are not going to be able to sell 49 guns apiece and get away with it, most states are community property. Let's see Susie and Chip show us a receipt that says they are the owner.

The problem with a 50-gun metric, to me, is that as soon as Joe Nutbag shoots someone with the 37th gun sold, that metric is going to be reduced by law to 25 guns. Then 10 guns. And, finally, no private sales. Zero.

The gun grabbers know this. When you can't get the camel into the tent, you have to invent the camel's nose.

[buckhorn_cortez]

Because of the way in which the applicable law defines a dealer in firearms, it is not clear when someone who believes himself to be a hobbyist firearms collector, or is otherwise engaged in what he believes to be routine gun trading, is engaging in the business of being a dealer and thereby risks federal prosecution for being an unlicensed gun dealer.

Is the person is using gun trading as a way to generate money or simply collect guns? If they're using guns as a source of income, then they're a business and require an FFL.

If the person is unclear whether they need a license or not, then they need to consult with both an attorney and the BATF.

If you're unsure of your status, then it is up to you to find out from a legal standpoint and from the agency involved in the regulation.