From what I understand of the reasons it was due to a bunch of firearms that were bought (supposedly over $50k). They say that Koresh bought them. I believe that they claim that there were a bunch of unregistered full autos. They also claimed Koresh was involved in statatory rape. I think that was part of the "warrant" that they were trying to "serve" Koresh. They claimed that Koresh never left the compound, but he jogged on the road outside the compound daily.
There was nothing about statutory rape in the warrant, although there were some rumors in the affidavit. They didn't even have the warrant in their possession, when they conducted their raid. It was, BTW, a search warrant, not an arrest warrant, so serving it when he was outside the complex would not have made any sense.
Supposedly the BATFers were first put on to Koresh and company when a delivery driver dropped a package and out fell grenade hulls. (which are not illegal). But then as part of their "Showtime" operation, they developed other information. Such as the presence of the "subversive" publications, Shotgun News (obtainable at most Texas bookstores and grocery stores, plus WalMart, I have several copies laying around the house now) and "other related subversive publications", including a rumored copy of "The Anarchist Cookbook" (available in many libraries, and from Amazon ($18.87) and Barnes and Nobel) The BATF, and the Judge, would not let anyone other than the BATF examine the weapons (AR clones and AK clones) recovered from the fire to determine 1) if the weapons had been converted to full/select fire, and 2) if they had, had the conversion been done before, or after the fire.
You can read a transcription of the Affidavit used to obtain the warrant, and one of the warrant itself, along with another transcription of the affidavit. Koresh apparently knew the BATF was coming, even before the search warrant, and invited them out to take a look see. The Sheriff testified that he had always found Koresh cooperative.
One little interesting part of the affidavit goes:
Eight people, including Vernon W. Howell and Paul Gordon Fatta were arrested by the McLennan County Sheriff's Department, Waco, Texas, and were indicted for attempted murder by a McLennan County Grand Jury. All eight subjects were tried in State court at Waco, Texas and were acquitted of the charges of attempted murder by a jury.
After the armed assault by Howell and his followers
Now obviously if there had been an armed assault, and someone was shot, that would be attempted murder, but the jury decided otherwise, so this, like the most of the rest of the affidavit is pure Bovine Scat, and not material to the alleged violation of the law. (i.e. failure to register and pay the tax on machine guns and destructive devices).
One, or more, of the people living at Mt. Carmel center was a federally licensed firearms dealer. As part of supporting themselves, the BD's constructed and sold firearms, mostly at area gun shows. Heck, if I lived then were I live now, I might have bought one from them.