Keeping Gun Dealers Honest Act of 2025

This bill broadens the authority of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) to administer federal laws governing the licensing, inspection, and enforcement of federally licensed dealers, importers, and manufacturers of firearms (federal firearms licensees, or FFLs). The bill also increases criminal penalties for FFLs and licensed collectors who commit certain recordkeeping violations. With respect to licensing, the bill allows the ATF to deny an application for a federal firearms license if it would endanger public safety or if the applicant is unlikely to comply with the law. Additionally, the bill enhances the ATF's inspection authority, including by increasing the maximum number of annual compliance inspections to three (currently, one) and by authorizing an additional 80 personnel to conduct inspections. The bill also expands the ATF's enforcement authority, including by allowing it to suspend the license of or impose a civil penalty on an FFL who violates federal firearms laws or regulations and by allowing it to require an FFL to conduct physical inventories if the FFL unlawfully transfers a firearm or if 10 or more firearms used in a crime are traced back to the FFL. Finally, the bill increases the maximum prison term to five years (currently, one year) for an FFL or licensed collector who knowingly makes a false statement or representation in required firearms records.