22915 OCT 07 1980 MEMORANDUM TO: [ ] FROM: [ ] SUBJECT: Memorandum for the File -- Letter to [ ] [ ] has requested advice concerning the repair of an M-1 carbine which he converted into a fully automatic weapon by the addition of an M-1 "conversion kit." During 1971 [ ] filed an application and paid the $200 making tax to convert an M-1 carbine into an automatic weapon. This was accomplished by adding the necessary parts (or kit) to the firearm so that it would fire automatically. Seven parts make up the kit which enables the M-1 to fire automatically. The application to convert the M-1 was approved and the "new" weapon was registered to [ ] in the National Firearms Registration and Transfer Record. [ ] now states that the converted carbine never worked properly and was plagued by malfunctions. He asks if he may replace the M-1 receiver with another M-1 receiver without paying another $200 tax. Section 5845(i), Title 26, U.S.C., defines the term "make" to include manufacturing, putting together, altering, any combination of these, or otherwise producing a firearm. Section 5821(a) states that there shall be levied, collected, and paid upon the making of a firearm a tax at the rate of $200 for each firearm made. The replacement of the defective M-1 carbine receiver by another operable M-1 carbine receiver is not a new making of a machine gun. Seven parts make up the M-1 conversion kit which is the registerable item. [ ] paid the $200 making tax at the time he acquired the conversion kit. The replacement of the M-1 receiver, which is not in and of itself a Title II firearm, is a gunsmithing operation which does not incur an additional tax. - 2 - Moreover, even with the removal of the defective M-1 receiver, [ ] would still be in possession of a machinegun, i.e., the seven-part conversion kit. The addition of a new M-1 receiver merely creates a different "type" of machinegun. That is to say, the "new" item is one that will shoot in the full automatic mode. It should be noted that in a letter dated January 11, 1968, the Bureau approved the registration of an M-1 carbine and conversion kit which contained sufficient parts to convert the carbine into a fully automatic rifle. This was based on Rev. Rul. 54-606 which held that the possession of sufficient parts to assemble an operable firearm constitutes the possession of a firearm. Apparently, the individual received the parts from two different sources and thus no transfer tax was incurred. Prior to the amendment of the NFA in 1968 the possessor an NFA firearm could make application to register it. The January 11, 1968, letter also advised that if, at any time in the future, the firearm was converted into a fully automatic weapon, the possessor would have to file Form 1A, "Declaration of Intent to Make a Firearm" and pay the $200 making tax. Since no making tax was incurred until the firearm was "put together," this action would appear to be supported by prior section 5821(2) of the National Firearms Act. This position however, is distinguishable from the instant case because [ ] paid the $200 making tax at the time of the conversion in 1971. In addition, the amendment to the National Firearms Act in 1968 made the "conversion kit" itself a machinegun, and registerable under the Act. In light of the above, payment of an additional $200 making tax by [ ] is not necessary if he merely replaces the defective M-1 receiver with another M-1 receiver. Certain clarifying changes have been made in the letter to Mr. [ ] and I recommend your approval. [Signed]