http://www.cs.cmu.edu/afs/cs.cmu.edu/user/wbardwel/public/nfalist/nfa_faq.txt
Owning or making an NFA weapon
It is illegal for anyone to have possession of an NFA weapon that
is not registered to them in the NFA Registry. It is also not
possible for anyone, except government entities, to register an
existing NFA weapon that is not registered, except within 24 hours
after one is made by a class 2 NFA manufacturer. An individual
otherwise able to own any gun under federal law can receive and own
any NFA weapon (local law permitting, ATF cannot approve a transfer
where federal, state or local law would be violated by the
transferee possessing the weapon in question, see 26 U.S.C. sec.
5812(a)(6)) on a Form 4, "Application for Tax Paid Transfer and
Registration of Firearm". Non-FFL holders may only purchase an NFA
weapon from a dealer or individual within their own state. If the
weapon is located out of state it must be transferred to a class 3
dealer within the state, before transfer to the non FFL purchaser.
C&R FFL holders (type 03) may purchase C&R NFA guns from out of
state dealers and individuals. Type 01 FFL holders, who are not
qualified to deal in nFA weapons, that is are not SOT taxpayers
(see below) may purchase any fully transferrable (no dealer
samples, see below) NFA weapon, from an out of state source. If the
FFL holder is an individual he must submit fingerprints,
photograph, and the law enforcement certification.
The transfer involves paying the transfer tax, which is $200 for
all the NFA weapons, except AOW's for which the tax is a mere $5.
Individuals also have to get one of several specified local chief
law enforcement officers to sign the form (see below on the law
enforcement certification for more information), submit their
fingerprints in duplicate, and attach photos of the transferee to
the form. While the transfer tax is levied by law on the
transferor (seller), in practice the transferee (buyer) is expected
to pay the tax. Initial transfers to individuals tend to take at
least 4 months, although subsequent transfers can be quicker.
Or you can make any NFA weapon, except for machine guns (see
below), by filing ATF Form 1, "Application to Make and Register a
Firearm", and paying the $200 making tax, which applies to all of
these weapons, including AOW's. You may not make the proposed
weapon until the Form 1 is returned to you approved. The law
enforcement certification, photos and fingerprints also apply to
Form 1's, and in fact to any transfer to an individual.
Additionally the manufacturer of any NFA weapon, including an
individual making one on a Form 1 must mark the receiver of the
weapon with the maker's name and city and state. NFA Branch can
grant exemptions from this for DD's. All types of corporations,
including corporate type 01 FFL holders, need not do the
certification, photo and fingerprint requirements. Any of the
forms listed, and the fingerprint cards, are available for free
from ATF, either in Washington, D.C. or your local office.
The original of the paperwork should be kept in a safe place, I
suggest a safe deposit box. ATF can demand to see the form (see
below on your 4th amendment rights). On a tax paid transfer, ATF
puts a tax stamp, like a postage stamp (or like the one that caused
the American colonists to take up arms), on the document. Once it
is used you cannot get another. ATF can supply a copy of the form
should you lose one, but is not unheard of for ATF to have no
record in their computer of a weapon registered to you. Having the
paperwork can avoid a lot of hassles. Every effort should be made
to not lose it.
Additionally, if the gun in question is a machine gun, not having
the paperwork can lead to being charged with a violation of 18
U.S.C. sec. 922(o), the ban on possessign machine guns made after
May 19, 1986. All four of the federal circuit courts of appeals
(U.S. v. Just, 74 F.3d 902 (CA8 1996), U.S. v. Gravenmeir, 121 F.3d
526 (CA9 1997), U.S. v. Gonzales, 121 F.3d 928 (CA5 1997) and U.S.
v. Franklyn, 157 F.3d 90 (CA2 1998)) that have addressed the issue
have ruled that sec. 922(o) prohibits possessing all machine guns,
and it is an affirmative defense to such a charge that the weapon
was legally possessed before it took effect. It is up to the
defendant to prove an affirmative defense, although by a lower
evidentiary standard than the government needs to prove to show a
criminal violation (usually preponderance of the evidence versus
beyond a reasonable doubt). It is not up to the government to prove
the weapon was not registered, for a charge under sec. 922(o), at
least according to all the appeals courts that have considered the
question. If you don't have the paperwork, and it isn't in ATF's
computer, (it is likely they will check, even though they don't
have to prove non-registration, they don't want someone to wave a
registration form in their face during a trial) you can have a
serious problem.