Hi, guys, confusion somewhere. I think I am the only "Jim" on this thread and I never said anything about logging everything. My comment was limited to C&R items and I feel that selling to a non-FFL holder increases the possibility that the gun may be misused and trouble could result if the sale was not strictly in accordance with the law. When buying/selling non-C&R items or when selling a C&R item to a non-FFL, a C&R license has no meaning at all. You have to follow all the federal and state/local laws the same as a non-licensee.
Now, in practice, I have never known a C&R FFL holder who was subject to an inspection, although I have been told that some have been. There is no regular inspection; apparently an inspection is carried out only if there is the kind of "trouble" I mentioned, like a C&R handgun the C&R licensee sold turning up at the scene of a crime. Then someone is going to want to know who it was sold to and the C&R licensee better have complete records and be in compliance with the law. If he has violated the law, he could not only lose his license, but could conceivably be charged with being an accessory to the crime.
The presumption of a C&R license is that it is issued to a collector whose collecting is done at his home, so BATFE inspections of C&R FFL holders is normally limited to checking the bound book. That can be done at the FFL holder's home with the holder's permission or at the BATFE office. Even if the book is examined at the FFL holder's home, BATFE cannot "inspect" the home as they can a dealer's premises. If they suspect a crime has been committed, they can search the home, but only after they obtain the specific consent of the occupant or a search warrant, the same as for any other home search.
Jim