http://www.atf.gov/sites/default/files/assets/Firearms/FirearmsIndustry/open_letter_on_the_redesign_of_stabilizing_braces.pdf
Part of it...
The GCA does not define the term “redesign” and therefore ATF applies the common meaning. “Redesign” is defined as “to alter the appearance or function of.” See e.g. Webster’s II New College Dictionary, Third Ed. (2005). This is not a novel interpretation. For example ATF has previously advised that an individual possesses a destructive device when possessing anti-personnel ammunition with an otherwise unregulated 37/38mm flare launcher. See ATF Ruling 95-3. Further, ATF has advised that even use of an unregulated flare and flare launcher as a weapon results in the making of a NFA weapon. Similarly, ATF has advised that, although otherwise unregulated, the use of certain nail guns as weapons may result in classification as an “any other weapon.”
The pistol stabilizing brace was neither “designed” nor approved to be used as a shoulder stock, and therefore use as a shoulder stock constitutes a “redesign” of the device because a possessor has changed the very function of the item. Any individual letters stating otherwise are contrary to the plain language of the NFA, misapply Federal law, and are hereby revoked.
Any person who intends to use a handgun stabilizing brace as a shoulder stock on a pistol (having a rifled barrel under 16 inches in length or a smooth bore firearm with a barrel under 18 inches in length) must first file an ATF Form 1 and pay the applicable tax because the resulting firearm will be subject to all provisions of the NFA.