FFL Licensing Procedures & Recordkeeping 5 — Questions and Answers
Question 1: An FFL's bound book is destroyed in a fire. What must the licensee do?
- Reconstruct records from memory within 90 days
- Notify ATF in writing as soon as possible and report the loss (Correct answer)
- Apply for a new FFL license
- No action required if less than 50 records were lost
Correct answer: Notify ATF in writing as soon as possible and report the loss
An FFL must immediately notify ATF in writing when bound books or other required records are lost or destroyed, regardless of the cause.
Question 2: What does 'straw purchase' refer to in the context of FFL transactions?
- Purchasing a firearm with cash instead of a check
- A person buying a firearm as the actual buyer but falsely claiming to be on Form 4473 (Correct answer)
- Purchasing multiple firearms in the same transaction
- Buying a firearm without a background check at a gun show
Correct answer: A person buying a firearm as the actual buyer but falsely claiming to be on Form 4473
A straw purchase occurs when someone who legally cannot buy a firearm uses another person to buy it on their behalf, with the actual buyer falsely identified as the transferee on Form 4473.
Question 3: How many ATF compliance inspections may occur at an FFL premises per year under normal circumstances?
- One per year (Correct answer)
- No limit
- Two per year
- Only one per 5-year license period
Correct answer: One per year
Under the Firearm Owners Protection Act of 1986, ATF may only conduct one routine compliance inspection of an FFL per year, with exceptions for criminal investigations.
Question 4: When transferring a NFA item (e.g., suppressor) between two FFLs who are both SOTs, which form is used?
- ATF Form 4473
- ATF Form 4
- ATF Form 3 (Correct answer)
- ATF Form 1
Correct answer: ATF Form 3
ATF Form 3 (Request for Tax-Exempt Transfer of Firearm and Registration to Special Occupational Taxpayer) is used for transfers of NFA items between licensed dealers who are SOTs.
Question 5: If an FFL dealer is also a Special Occupational Taxpayer (SOT), what annual tax must they pay for a Class III dealer designation?
- $500 per year
- $1,000 per year (Correct answer)
- $2,500 per year
- $5,000 per year
Correct answer: $1,000 per year
Class III dealers (SOTs) pay an annual Special Occupational Tax of $500 for small FFLs or $1,000 for larger operations, with $500 being the standard rate for dealers with gross receipts under $500,000.
Question 6: What is the minimum age for an FFL to sell a handgun to a non-licensed buyer?
- 18 years old
- 19 years old
- 21 years old (Correct answer)
- 25 years old
Correct answer: 21 years old
Federal law prohibits FFLs from transferring handguns to any person under 21 years of age.
Question 7: Which record must an FFL maintain that documents both purchases (acquisitions) and sales (dispositions) in a single chronological log?
- ATF Form 4473 file
- Acquisition and Disposition (A&D) bound book (Correct answer)
- Multiple Handgun Sale Report (Form 3310.4)
- Annual Firearms Manufacturing & Export Report (AFMER)
Correct answer: Acquisition and Disposition (A&D) bound book
The Acquisition and Disposition (A&D) bound book is the primary record that logs all incoming and outgoing firearms transactions in chronological order.
FFL Licensing Procedures & Recordkeeping 5
An FFL's bound book is destroyed in a fire.
What must the licensee do?