I've NEVER sent a schedule list of my Trust inventory. Never. Amendment sheets are the only additions that
Grow more DATA, like an address change.
The Schedule list is a personal log kept with the original trust. This adds clarity to when the items were obtained
By the trust....in case someone of the law has reason to scour through your trust.
Secondary benefit incase of theft situations.
Correct. But I'd add that the Schedule A is one major part of the documentation that the trust does indeed own the item, so it's important that you make a form to that effect whenever you add something to the trust, so there is no question that you are using it as a sham but are actually keeping ownership of the item yourself. This is also true of adding trustees. Adding trustees is subject to the state's laws on trusts and how to document them, but (at present) the BATFE does not require you to submit paperwork on changes or additions to trustees, but if a question comes up they want to see a notarized form proving that the individual you claim is a trustee is both legally a trustee and that he/she has knowingly accepted that status (and therefore the legal liability and responsibility that goes with it). But that doesn't axiomatically mean you have a statutory obligation to provide them with such documents. This is mostly (I suspect) so that the BATFE will have a paper trail they can use to hammer trustees if they don't do things right. It removes "plausible deniability" if the BATFE is considering legal action against the trust or trustees for violations of the law.
I'm no lawyer, but it seems to me that so long as you comply carefully with the laws of the state in which the trust is organized as regards appointing trustees and documenting that appointment, unless and until the BATFE requires us to submit photos and fingerprints of all trustees they don't have a case because there is no rule that requires a specific form to be filed when making changes in trustees that I'm aware of.
Thus, it would seem to me that if the trust state allows trustees to be added or removed at-will without formal documentation (verbally) one might want to operate on the principle of "if you don't have the information, they can't subpoena the information."
An example of this is my long-term understanding of income tax law given to me by my accountant. The IRS will tell you that you "should" keep your supporting tax records for "seven years," but there is no actual law that requires you to keep such records at all. What happens is that if you are audited within the first three years after you file, the burden of proof is on you to prove that your deductions are allowed by submitting evidence (receipts etc.), but after that time, if you are audited the burden shifts to the IRS to prove that your deductions are not legitimate. What this means from the practical perspective is that you are NOT required to keep personal tax records at all. You can throw everything away right after you file. The risk you take is that you'll be audited in the first three years and won't be able to show proof of the deductions, which will then be disallowed. But the benefit of throwing things away is that after the first three years, if the IRS wants to audit you THEY have to come up with the records proving your deductions are NOT legitimate.
Is anybody seeing why the IRS says you must keep seven year's worth of records yet?
If you HAVE the records, they can SUBPOENA the records from you and you must produce them. If you don't, or if you destroy them after they subpoena them, that's a serious crime. If, however, you have a standing routine policy of disposing of those records on a particular schedule, then there will be nothing to subpoena, and they will have to find another way to build their case. You can take your chances by disposing of all such information right after filing, but you risk having your deductions disallowed for the first three years, but you gain the advantage of not being forced to provide potentially incriminating evidence if the IRS goes on a fishing expedition later. My policy for decades has been to take the risk by disposing of ALL supporting documentation immediately after I file. Of course, I don't have a complicated return and few deductions, so if I get audited I won't have to pay much more by way of taxes if I can't produce the records. Your mileage may vary.
BTW, the rules are different for BUSINESSES, where you CAN be dinged for not keeping proper records. My statements only apply to personal income tax records, and my advice is worth exactly what you paid for it...
Anyway, the point I'm trying to make is that so long as you abide by the absolute letter of the law when it comes to the NFA (or any other law), they can't ding you for not doing things that they "suggest" but which are not actually required by a statute or enforceable rule. They might be able to make things difficult for you however. You can generally tell what the law actually requires when they use the words "must," "shall," "required by XXX statute" or other language indicating reference to a published rule or law, which they are generally very careful to do when citing their legal authority to demand something of you. When they say "we'd like it if you..." or "you should" or other non-compulsory language one can be skeptical as to whether complying will or will not be in your best interests and decide what you want to do based on the circumstances.
Of course, this means that you have to know exactly what the laws and regulations actually say and be willing to politely decline to take their suggestions, which may put you on their radar for greater scrutiny. There ain't no such thing as a free lunch...
That being said, I keep notarized copies of all trustees appointments in my file, but I don't send them in.
