ATF Final Rule on Stabilizing Braces and your Gun Trust

On Monday, January 31, the Bureau of Alcohol, Tobacco, Firearms, and Explosives’ (ATF) published the final Factoring Criteria for Firearms with Attached “Stabilizing Braces” rule for public inspection in the federal register.

This rule subjects almost all firearms with a stabilizing brace to the registration and taxation requirements of the National Firearms Act.

There is currently litigation over this rule, but that litigation will take time to sort out. For our clients who wish to comply with the registration process, we have put together this information to help you.

The rule was first posted on January 13 and ATF has attempted to clarify several issues, which include:

1) Braces that are removed from firearms do not necessarily have to be destroyed or altered in a way that prevents them from being reattached. This is because under United States v. Thompson/Center Arms Co. if the part can be assembled into multiple lawful configurations, it is not unlawful to possess. If you own a 16 inch AR pistol, it could be assembled into a lawful pistol.

2) Imported pistols with stabilizing braces were not initially permitted because of violating 18 U.S.C. § 922(r). But ATF updated their FAQ page to state that while the assembly would violate the rule, they will permit those with imported pistols the same options as anyone else under the fule rule without further modification.

Section 922(r), in the relevant part, makes it unlawful to assemble from imported parts a semiautomatic rifle that is otherwise not importable. The implementing regulations of the GCA at 27 CFR 478.39 provides that a person may not assemble a semiautomatic rifle using more than 10 of the imported parts listed in the relevant paragraphs of the regulation. As discussed in section IV.B.8.e of the final rule, the criminal violation under section 922(r) is for the “assembly” of the semiautomatic rifle; therefore, no modification of such firearm would cure the 922(r) violation because the “assembly” has already occurred. Accordingly, a person with an imported pistol that was subsequently equipped with a “stabilizing brace” will have the same options as anyone else under the final rule. Should that person choose to register the firearm, no further modification of the firearm with domestic parts is required.

One issue that had caused much confusion is the language about proving the firearm was owned by a trust before the January 30th date.

The ATF eForm 1 FAQ states:

27. CAN I REGISTER MY SHORT-BARRELED RIFLE QUIPPED WITH A “STABILIZING BRACE” PURSUANT TO ATF FINAL RULE 2021R-08F TO MY TRUST?

Answer: In short, a trust may not register a firearm equipped with a “stabilizing brace” that is a short-barreled rifle pursuant to ATF Final Rule 2021R-08F unless the trust can establish through documentary evidence that the trust possessed the firearm prior to the date the final rule is published in the Federal Register.

Under the final rule, the Attorney General has authorized a tax forbearance that allows current possessors of firearms equipped with a “stabilizing brace” that meet the definition of “rifle” and have a barrel or barrels less than 16 inches to register the firearms tax-free. A current possessor is a person who possessed the firearm with an attached “stabilizing brace” prior to the date the final rule is published in the Federal Register.

Accordingly, any trust that seeks to register a firearm with an attached “stabilizing brace” that is a short-barreled rifle pursuant to Final Rule 2021R-08F must include with the eForm 1 application evidence that establishes the trust possessed the firearm prior to the date the final rule is published in the Federal Register. This evidence will generally include the signed, dated, and notarized terms of the trust or trust schedules that list or provide a description of the property held in trust. For trust applicants, ATF will perform a thorough review of the trust documents provided with the eForm 1 application to ensure the firearm sought to be registered to the trust was property possessed by the trust prior to the date the final rule is published in the Federal Register. Therefore, an eForm1 application to register a firearm equipped with a “stabilizing brace” to a trust will be disapproved if the applicant fails to demonstrate the trust possessed the firearm prior to the date the final rule is published Federal Register.

Many dealers have contended that the assignment sheet or document evidencing transfer must be notarized before publication. That is not what the ATF states in the FAQ, but it is easy to understand why those unfamiliar with legal construction might come to this conclusion. The document states the trust must be valid and contain a notary when required. There must also be a valid assignment sheet or schedule that provides evidence that the item was properly possessed before the date the final rule is published (January 31, 2023). Your document showing the transfer must be dated and transferred on or before January 30, 2023. Unless your state requires a transfer to a trust to contain a notary, we believe this document does not need to be notarized, even if your trust requires a notary. ATF has always held that the trust must be valid under state rules, and imposing an arbitrary requirement that a schedule must also be notarized when state law does not require it, would seem improper.

ATF has published a guide to help with filing an eForm1

One major problem with using the eForm1 compared to the paper form is that when they are denied, one has to start over again. ATF has addressed this in their FAQ

23. MY EFORM WAS DENIED AFTER THE 120-DAY TAX FORBEARANCE PERIOD, CAN I RESUBMIT THE APPLICATION TAX-FREE PURSUANT TO FINAL RULE 2021R-08F?

Answer: Yes, provided the application was not denied because of a failed background check. The option to register a firearm pursuant to Final Rule 2021R-08F will be disabled in the eForm system after the 120-day tax forbearance period. Any re submission will need to be done using a paper Form

1. Guidance will be provided in the original disapproval and instructions for submitting a paper application can be found on the Form 1, Application to Make and Register a Firearm.

Hopefully this will clarify some of the issues dealing with the sig brace, your options, and if you qualify for a tax free transfer to your Gun Trust.