June 23, 2025 – According to the Department of Justice’s Fiscal Year 2026 Budget and Performance Summary, the Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”) intends to eliminate 541 Industry Operations Investigators (“IOIs”) from its workforce. It has been estimated that there are approximately 800 IOIs currently employed by the ATF. The Budget and Performance Summary states that this cut will reduce the ATF’s capacity to regulate firearms and explosives industries by 40% in Fiscal Year 2026. It has been reported that this move is part of President Trump’s effort to downsize and streamline the ATF before potentially merging it with the Drug Enforcement Agency (“DEA”).
While this appears to be a significant reduction, only a small fraction of Federal Firearms Licensees (“FFLs”) sell the majority of the firearms at retail, so this streamlined workforce should be able to adequately monitor the industry. In addition, the budget reduction does not appear to apply to ATF’s law enforcement side, which is responsible for investigating suspected crimes. FFLs are subject to ATF unannounced compliance inspections once per year, but the majority of FFLs are inspected on a much less frequent basis. These regulatory compliance inspections are conducted by IOIs, the number of which is to be reduced. IOIs typically inspect the firearms in an FFLs’ inventory to confirm no firearms are missing, and the acquisition and disposition records, Form 4473s and related records to ensure that they are being properly completed. Under the former zero tolerance policy instituted by the Biden Administration, many believed that ATF abused this process to revoke the licenses of FFLs with relatively minor violations the continued operation of which did not pose a threat to public safety or impede law enforcement’s ability to trace firearms.
Renzulli Law Firm will continue to monitor developments related to the ATF. If you have any questions regarding ATF compliance inspections, please contact John F. Renzulli or Christopher Renzulli.