One of the most common questions Class 3 SOT Dealers ask has finally been addressed by the ATF and should help clear the inconsistent answers given by local ATF offices.
Is a NICS check required when a Gun Trust is used to purchase firearms that are subject to the NFA?
Short Answer: Yes.
Below we explain why we believe that a NICS and 4473 were previously required even if local ATF agents told dealers otherwise. We raised this issue in our Comment to 41P. Perhaps ATF is paying attention to some of the comments that were filed in response to 41P.
The ATF’s letter seems to be an interesting admission that appears to contradict their statements as to why the suggested changes mentioned in 41P are necessary.
We have always thought that the 4473 and NICS check should be done when a Gun Trust is used to purchase NFA firearms. Unfortunately, there have been many who have reported that dealers were not required to do a NICS check (background check) and only required to complete a 4473 for Gun Trusts. Much of the media outrage over background checks not being completed for Gun Trusts was over this very issue.
The confusion comes from the instructions on the back of the 4473 form where it states that no NICS check is required for a “person” when purchasing a NFA firearm.
A “person” under the GCA is not defined to include a trust. Under the GCA, 18 U.S.C. § 921(a)(1), a “person” is defined to include “any individual, corporation, company, association, firm, partnership, society, or joint stock company.” This is different than how a person is defined under the National Firearms Act – “an individual, business entity, or trust”. ATF states in their letter that:
ATF has interpreted the GCA exception in sections 922(t)(3)(B) and 478.102(d)(2) to mean that firearms transfers are exempt from a NICS check when they have been approved under the NFA to the person receiving the firearm. Unlike individuals, corporations, partnerships, and associations; unincorporated trusts do not fall within the definition of “person” in the GCA.
Because unincorporated trusts are not “persons” under the GCA, a Federal firearms licensee (FFL) cannot transfer firearms to them without complying with the GCA. Thus, when an FFL transfers an NFA firearm to a trustee or other person acting on behalf of a trust, the transfer is made to this person as an individual (i.e., not as a trust). As the trustee or other person acting on behalf of the trust is not the approved transferee under the NFA, 18 U.S.C. 5812, the trustee or other person acting on behalf of a trust must undergo a NICS check. The individual must also be a resident of the same State as the FFL when receiving the firearm.
When purchasing an NFA firearm, the person acting on behalf of the trust will complete the ATF Form 4473, items 1 through 10b with his or her personal information. Item 11a “Are you the actual transferee/buyer of the firearm(s) listed on this form?” should be answered “YES”. The transferor will conduct the NICS check and complete Items 21a though 21c and Item 21d, if applicable. Item 22 will be left blank, as the transaction is not exempt from the NICS check.
As confusing this may seem, it is really quite simple, an individual does not need the NICS check because of the CLEO signature, and the FBI background check that is run on the fingerprints that are submitted with the ATF Form 4 or Form 1. A Trust, on the other hand, does not need fingerprints or the CLEO and thus the NICS check is required because it is the modern equivalent of the CLEO and fingerprints.
In summary, here is what is ATF is stating is required when a Gun Trust or an individual uses an ATF Form 4 to purchase a NFA Firearm:
Gun Trusts – 4473 and NICS Individuals – CLEO, Fingerprints, photographs, 4473, no NICS (As of May 6th 2014)
If your Class III SOT is not doing a NICS check along with the 4473 when a Gun Trust purchases a NFA firearm you might let them know about the ATF letter below. I am sure ATF will starting looking at these records with inspections in the future.
If you would like a full copy of their letter to Dakota Silencer it can be downloaded here ATF NICS & 4473 Trust Response Letter.pdf