FFL/gunsmith audit compliance question

[jc89]

Been looking into gunsmithing and opening an FFL, and read that you have to maintain a log of ingoing/released firearms for the sake of annual ATF audits.

To make sure I understand the details correctly, I figured I'd toss over some general questions to guys who've been in the industry for a while.

1. If you use a digital solution (instead of paper), how does the audit work? I imagine simpler since they're not flipping through pages of stuff. Any recommended software?

2. Do you require separate bound books (paper or digital) if you're offering gunsmithing as well as firearms sales?

3. During an annual audit, is the ATF allowed to collect and check information about customers (purchase or repair) as they please? Or do they need a subpoena or something of the sort?

The more I look into it, seems like the more headaches there are to deal with...

 

[Garrobo]

The average

FFL holder or gunsmith doesn't have that much stuff to tally to warrant a computerized system to take care of his records. I had an FFl and did gun work for 35 years and I kept everything in a ledger. No problemo. I would think that even in these days that it would be a good idea, if not mandatory, to fill out a 4473 for any and all firearms sales, if for no other reason than to get the buyer's signature on paper. In the years that I sold guns I had only one audit and that was because I was ready to give it up and wanted the BATF to come in and look at my records to make sure everything was up to date and legal before I sent my records in. The only thing that interested them was the records of two Streetsweepers which I had sold to a couple of friends since they had been classified as Class 3 weapos for some reason or other. They wanted to know if I had notified the buyers of the new classification of these firearms which I had. They DID take down this information only.

 

[jc89]

Thanks Garrobo, good info.

Now, if you you wanted to also buy/sell (hold inventory), then I suppose electronic would make sense right?

 

[MI2600]

I don't remember the exact ATF wording, but you have to maintain transactions in paper log book with non-removable pages. I called ATF and they agreed that I could use an essay book like we used in college.

 

[HexHead]

You only have to log firearms in if you keep them overnight when repairing them.

 

[dogtown tom]

MI2600 I don't remember the exact ATF wording, but you have to maintain transactions in paper log book with non-removable pages. I called ATF and they agreed that I could use an essay book like we used in college.

Not true.
https://www.atf.gov/file/11226/download

 

[il.bill]

A really nice Bound Book for $20: http://www.amazon.com/BookFactory%C2%AE-Bound-Book-Record-LOG-100-GUN-W01-FFL-T40/dp/B0057PRHCM. Recording the acquisitions and dispositions is not that big of a deal for a low volume operation (about twenty different firearms entered a month) like mine.

Any firearm not returned the same day must be entered if kept overnight for gunsmithing work. Form 4473 is not required when returning such firearm to the person who originally brought it in.

Separate Bound Book(s) can be used for different operations if YOU want, like sales / transfers / gunsmith work. I just use the single book and note "Sold" / "Transfer" / "Work" as appropriate in the "Code" box on the line.

There is certainly paperwork to do with 4473s, the Acquisition/Disposition record, Bills of Sale, etc., but the requirements are not really onerous. I have run a garage for over 40 years, so the recordkeeping is not a whole lot different from maintaining repair records on customers' vehicles for me.

Dot your "I"s and cross your "T"s and any audit will likely go smoothly. One of the most pleasant surprises in getting my 01FFL and becoming a licensed dealer has been how absolutely courteous, professional, and helpful every single ATF employee has been throughout the process.

My advice: if you want to do it, then full speed ahead! Keep it simple - you could always computerize (I believe you may need permission from the ATF - just call them and ask) the record keeping later if things get too complex for pen and paper.

 

[jc89]

Thanks for the suggestion bill.

When you've been audited, is the ATF just checking that the books match? Do they ever collect any info or look into customer info?

 

[Captcurt]

Annual?

I would not worry too much about an audit. I have been in business for 6 years and have not had a visit from ATF since the initial interview. Just log everything in your A&D book, dot the I's and cross the t's and you will be ok.

 

[natman]

Been looking into gunsmithing and opening an FFL, and read that you have to maintain a log of ingoing/released firearms for the sake of annual ATF audits.

To make sure I understand the details correctly, I figured I'd toss over some general questions to guys who've been in the industry for a while.

1. If you use a digital solution (instead of paper), how does the audit work? I imagine simpler since they're not flipping through pages of stuff. Any recommended software?

2. Do you require separate bound books (paper or digital) if you're offering gunsmithing as well as firearms sales?

3. During an annual audit, is the ATF allowed to collect and check information about customers (purchase or repair) as they please? Or do they need a subpoena or something of the sort?

The more I look into it, seems like the more headaches there are to deal with...

1) A decent computerized system would make audits much easier and faster since it would be easy to link things together and searching to find a particular record would be much faster.

2) If you are the gunsmith and the FFL, it would be possible to keep everything in one book, but I expect that assigning numbers to the guns would be easier if you had a separate book for repairs and stock. Assign the repair guns the number from the service tag and sales guns consecutive numbers.

In the shop where I worked we sent out repairs to an external gunsmith and there two books were pretty much required since sales guns required only one line (in and out) but gunsmithing guns required two lines (in from customer, out to gunsmith, in from gunsmith, out to customer).

3)The ATF inspectors get to examine the bound books and the 4473s. I don't remember them collecting any info. I will say that the ATF inspectors I dealt with were very professional and were willing to cut us some slack on some minor bookkeeping errors they found, on the condition that they didn't find them again in the future. (Which they didn't). It may have helped that the store was as straightforward a hunting store as you could imagine and nobody tried to see how far they could push the rules. We also treated them with the same level of courtesy and professionalism we received from them.

 

[tark]

Having worked for a firearms manufacturer and a class three dealer for twenty one years I must say That I had plentiful opportunities to talk to the ATF !!! In all honesty, I found them to be friendly and helpful, not at all the monsters the NRA makes them out to be. On the rare occasion we lost a serial number, they worked calmly and carefully with us to find it.
But know this, your ducks must be in a row before they do their compliance check! They can and will fine the hell out of you if you commit a serious boo-boo. We never did find that serial #. They fined the hell out of us.
The requirements and rules on a gunsmith's FFL are simple and easy to do. You will have no trouble.

 

[jc89]

1) A decent computerized system would make audits much easier and faster since it would be easy to link things together and searching to find a particular record would be much faster.

2) If you are the gunsmith and the FFL, it would be possible to keep everything in one book, but I expect that assigning numbers to the guns would be easier if you had a separate book for repairs and stock. Assign the repair guns the number from the service tag and sales guns consecutive numbers.

In the shop where I worked we sent out repairs to an external gunsmith and there two books were pretty much required since sales guns required only one line (in and out) but gunsmithing guns required two lines (in from customer, out to gunsmith, in from gunsmith, out to customer).

3)The ATF inspectors get to examine the bound books and the 4473s. I don't remember them collecting any info. I will say that the ATF inspectors I dealt with were very professional and were willing to cut us some slack on some minor bookkeeping errors they found, on the condition that they didn't find them again in the future. (Which they didn't). It may have helped that the store was as straightforward a hunting store as you could imagine and nobody tried to see how far they could push the rules. We also treated them with the same level of courtesy and professionalism we received from them.

thanks, lots of good info.

just curious, did they ever reverify any customer info (e.g. rechecking NCIS, or 4473 info) during audits? or are they just checking that all your current data matches?

seems like paper would be nice to start out with since it's nice and simple, and that these run pretty smooth. less hassle than expected...

 

[natman]

just curious, did they ever reverify any customer info (e.g. rechecking NCIS, or 4473 info) during audits? or are they just checking that all your current data matches?

seems like paper would be nice to start out with since it's nice and simple, and that these run pretty smooth. less hassle than expected...

I don't recall them rechecking anything, but I pretty much left them alone with the records unless they asked for something.

Paper works, especially if your volumes are not too high. The crucial thing is to design a procedure and follow it every time, regardless of which medium you use to keep the records.

Best of luck.