If the gun can't shoot bullets, its a really short shotgun. Under 18.5" is class 3.
That has been said a lot, but it isn't technically so. To be a Title II "Short Barreled Shotgun" the firearm must meet the definitions of that section which include the phrase "designed or redesigned to be fired from the shoulder." If it doesn't have any kind of butt-stock, it CAN'T be a shotgun -- short or otherwise.
It
could be a Title II "Any Other Weapon." If they produced it with a smooth bore, it would fall into the list of AOW definitions as "a pistol or revolver having a barrel with a smooth bore designed or redesigned to fire a fixed shotgun shell."
They can get around that by rifling the barrel -- but there's a mild absurdity in that there is not, nor has there ever been, a solid-projectile cartridge made that would work with a 28 ga. rifled firearm, so the rifling would be merely a legal side-step. And rifling totally screws up a shot pattern. They'd have to have a section of straight rifling at the end of the tube to STOP the spin or the patterns look like huge donuts.
The issue they maybe
can't get around is the Title II large-bore Destructive Device classification. Because the bore of the weapon is over .50" in diameter, it can be classed as a DD. Shotgun shells, and guns chambered for them, are usually exempted from the DD classification because they are considered appropriate for sporting purposes, but they don't HAVE to be exempted, and the BATFE has declared several revolving-shotgun designs as Destructive Devices in the past. (And those were full-sized guns, not revolving-shotgun-handguns, which is presumably even scarier.)
I'm guessing that the BATFE contacted Taurus during or around the time of the SHOT show and informed them that they would consider that gun a DD, period, and the idea was dead in the water, at that point.
(Oh, and I am obliged by longstanding tradition to repeat: there are NO "CLASS 3" guns. Class 3 is a description of the tax paid by dealers of Title II weapons. You can be a "Class 3" dealer, but you'll be selling "NFA Title II" guns.)