What Percent of ATF Inspections Result in Violations?

ATF inspections

An ATF inspection. It’s the number-one thing most firearms sellers dread. Whether you’re a small-scale collector, a large-scale dealer, or somewhere in between, no one wants to have the ATF come knocking at their door. Even if you’re 100% in the clear, it’s a highly stressful situation, and it can take time and money to sort everything out. 

But what percentage of ATF inspections actually result in a violation? Let’s find out. 

Data from the ATF’s 2020 Fact Sheet

One of the best resources for recent data on inspections, violations, and criminal investigations is the ATF’s 2020 Fact Sheet. It contains a wealth of information from the 2020 fiscal year and offers great insights into how prevalent inspections and violations are. 

According to their findings, the ATF performed a total of 5,827 firearm compliance inspections in the 2020 fiscal year. Of those inspections, 3,277 (56.2%) didn’t result in a violation, meaning the majority of firearms sellers don’t run into any compliance trouble after having their operations inspected. So, statistically speaking, less than half of gun sellers have issues.

As for those where there was a report of violations, this occurred 22.1% of the time to a total of 1,289 firearms dealers. 

ATF inspections

Further, 804 dealers (13.8%) received a warning letter and 306 dealers (5.3%) had to attend a warning conference. Only a small percentage encountered any issues beyond that where 96 dealers (1.6%) were forced to surrender their license and go out of business, 40 (0.7%) had their license revoked or denied, and 15 (0.3%) had other dispositions. 

Most Inspections Don’t Result in Violations…

This data shows us that most ATF inspections don’t lead to violations. So it’s not something to agonize over. As long as you stay up-to-date with ATF rulings and do your best to keep your business above board, you should be in pretty good shape. 

That said, violations definitely do occur, and just over 22% of all inspections lead to violations. However, most of these are fairly minor with less than 20% going beyond a warning letter or conference. Bear in mind that warning letters and conferences are no picnic and show an escalating level of seriousness, with the latter typically requiring you to attend a conference with a representative such as a regulatory advisor or attorney. But as long as you prove you’ll address your compliance gaps, it shouldn’t lead to you having to surrender your license or revocation.

…But It’s Still Not a Situation Gun Sellers Want to Be In

With that in mind, no one wants to deal with the hassle, stress, costs, and uncertainty of an ATF inspection. “No matter the structure or effectiveness of your compliance program, there is always a chance that you were not 100% perfect,” the National Association of Sporting Goods Wholesalers (NASGW) writes. “In fact, perfection requires every employee in your organization to perform every aspect of their job perfectly on a day-in, day-out basis and to be aware of a multitude of nuances of ATF regulations. As we are all humans, perfection is unlikely.”

If you find yourself in this position, it’s guaranteed to create headaches. So you want to do everything within your power to stay compliant and avoid an inspection. This brings us to our next point. 

How to Increase Compliance with FFL Software 

The primary reason for most violations is improperly maintaining accurate A&D records or incorrectly completing Form 4473. Here’s a list of the top 10 most frequently cited violations in 2020. 

ATF inspections

One of the best ways to stay ATF compliant is with FFL software, an innovative new technology that’s specifically designed to simplify and streamline A&D bound books and 4473s. 

With FastBound, for example, you can create unlimited bound books for consignment, transfers, gunsmithing, NFA, pawn, or anything else you need. It supports a wide variety of purposes and allows firearms sellers both large and small to store A&Ds digitally on a secure, cloud-based platform that’s continually updated as ATF rulings evolve. Rather than filling out paper forms the “old-fashioned” way, this lets you quickly and efficiently record transactions so they’re compliant with the latest rules and regulations. 

As for 4473s, FastBound allows you to turn any computer, tablet, or smartphone into a fully compliant form. This ensures you’re always using the latest form, and it also comes with digital signature support for quick and easy processing. So, as Form 4473 evolves, this guarantees you’re always using the most recent version — a key part of avoiding compliance issues. 

Here’s how it works. First, you add the firearm. The buyer then fills out their section and electronically signs their 4473 on the digital device. You run a background check to verify they’re eligible to purchase a firearm and complete your section. Then you’re on to the next sale. 

FFL software lets you dramatically streamline data entry, and because it uses digital text and numbers, you won’t find yourself squinting and guessing what information a customer entered on their 4473. So besides increasing compliance, this also saves time and lets you focus more on core operations rather than paperwork. 

Besides that, FastBound has several other key features including:

  • FFL autocomplete which fills out license numbers, expiration, and address to save time on redundant manual entry
  • Multi-state background check which automates NICS and many state background checks to help you move through transactions with less friction
  • Integrated EZ Check which is a contact manager that integrates with the ATF FFL EZ Check database, enabling you to quickly and accurately verify an FFL number
  • Compliance warnings that automatically alert you whenever there could be a potential compliance violation so you can catch it right away before it becomes a problem
  • An audit trail so you can easily find records and forms or pinpoint something you forgot to log
  • Smart searches to easily sift through piles of information to find exactly what you need (this is far more efficient than sorting through cardboard boxes)
  • Smart lists to organize your data and filter it to find what you actually use

And one last feature that only FastBound offers is guaranteed legal defense. We partner with FFLGuard, the number one firearms compliance program in the US for FFLS. What that means is that if you ever receive an ATF inspection, you’ll have access to top-of-the-line legal defense with no hidden hourly fees that are typically billed by lawyers. That way you have peace of mind you’re always covered, even in a worst-case scenario. 

ATF Inspections: A Recap

Recent data found there were 5,827 firearm compliance inspections performed in the 2020 fiscal year. Of those, 22.1% resulted in violations, with 13.8% of gun sellers receiving a warning letter and 5.3% needing to attend a warning conference. Only a tiny percentage (2.6% total) were more serious (sellers forced to surrender their license, have their license revoked, or go out of business). 

The bottom line is that using FFL software is one of the best ways to stay ATF-compliant and prevent needless issues. If you’re looking to streamline compliance and steer clear of ATF inspections, FastBound is the platform to consider.

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