FFL / Gun Store Security
August 5, 2015
SHOT Show 2017
January 31, 2017

What To Do During An ATF Audit

It’s natural to get a little nervous when the ATF shows up at your store, but a little knowledge and perspective will help you stay calm. So I thought I would dedicate this post to describing what to expect during an ATF audit and what you should do.

ATF AUDIT: First Steps
An ATF IOI (Industry Operations Investigator) will arrive at your store and immediately ask for a manager or the owner. The agent will provide their identification, a business card, and inform you that he/she is there to conduct an audit. Sometimes the ATF agent will call in advance to let you know they are coming, but it is more common for them to simply show up. If you have a larger store, there may be multiple agents.

Expect to begin with an opening conference during which they will explain everything they intend to do. They will ask for a space where they may work, and it’s in your best interest to provide them the best you have to offer – a well lit space, a comfortable chair, reasonable temperature – preferably away from your retail sales floor. The better their work environment, the faster they can work, and the faster they are out of your store.

MOST COMMONLY REQUESTED DOCUMENTS
Here are the records the ATF IOI will likely request:

  • Your bound book
  • Forms 4473
  • Multi-Handgun Sales (and long-guns if you’re in a border state)
  • Reports of lost or stolen guns
  • NFA registration document
  • Commercial documents being kept in lieu of making certain required entries

ATF AUDIT PROCESS
Their first order of business will typically involve checking your physical inventory against your boundbook. In years past the ATF conducted spot checks of your inventory, but that is no longer the case. Any audit the ATF now conducts will be a 100% audit. That means the following:

  • They check the serial number on the steel of every single firearm in your store and look for an open acquisition for that firearm in your boundbook.
  • They make sure all un-disposed lines in your boundbook are physically present in the store. If not, you likely failed to record a disposition or the firearm was lost/stolen and not yet reported.

Rapid Gun Systems helps your ATF agent conduct this check faster. You can print all of your open acquisitions for the IOI so he/she won’t have to sort through pages of disposed firearms when reconciling your inventory. Remember – the easier you make their job, the faster they will be out of your store.

Next the ATF agent will review your 4473s – typically about 3 to 6 months worth. The IOI’s job is to determine if you’re being complete and diligent. It only requires about 8 to 10 seconds for anyone (including your IOI) to check a 4473 for completeness. You should have a “second set of eyes” policy whereby every 4473 is reviewed by the sales person and a second person before it is filed. This means you’re double sure your 4473s are complete before the ATF shows up.  It is a simple form, but it is easy to miss a field.

Rapid Gun Systems has an integrated electronic 4473 that helps assure that your customers do not omit a field. The firearm section is auto-completed, too. This avoids transcription errors with serial numbers, manufacturer, caliber, etc. Fewer 4473 mistakes results in a happier ATF audit.

The ATF will compare the information on your 4473 to the disposition records in your boundbook. He/She will also seek to identify any instances of multiple handgun purchases (and long-gun in border states) to assure you’re filing 3310s.

The IOI will request a closing conference with you when the audit is complete. This is when you’ll be made formally aware of any violations identified.

KEEP THINGS IN PERSPECTIVE
The most important thing to remind yourself during the audit process is that the ATF does not revoke an FFL holder’s license on a whim. Their audit will help you identify what you’re doing well and what needs more attention. Hopefully you won’t have any problem areas, but if you do and you take quick action to make corrections, you’ll be just fine. Stores who run Rapid Gun Systems are in an even stronger position because of our built-in checks and focus on compliance. On-going education is included in your support contract with us – and we want you to use it so that we are all sure you’re using the system correctly. We can even help you conduct your own “mock” audit.

I hope this blog helps ease those nerves and gives you a few ideas for being prepared. Let us help you breeze through that next audit! And if you found this post helpful, please share with other gun store owners.

Onward!

Bart McCleskey, President

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