IX. Special Topic: Basics of a Gun Sale

In this chapter

This special topic covers the basic parameters of gun sales between licensed dealers and retail purchasers. In this section you will learn:

• The steps involved in retail gun sales at licensed dealers (as required by Federal law);
• Common indicators of straw purchasing and other illicit behavior that dealers are trained to recognize;
• The records generated and maintained by firearms dealers that you may want to request during discovery, such as:
  • ATF Form 4473 – Firearms Transaction Record;
  • ATF Form 3310.4 – Multiple-Handgun Sale Report;
  • Firearm acquisition & disposition records;
  • Sales receipts & customer data; and
  • Surveillance footage

The legal requirements for a gun sale depend on a number of factors, including whether the buyer or seller holds a federal license, state and local laws where the transaction takes place, and whether the buyer lives in the same state as the seller. Under federal law, several key obligations—such as the requirements to conduct a background check on retail sales and to maintain certain transaction records—attach only to federal licensees, not to unlicensed sellers engaged in a private sale.³²¹Dealers cannot simply sidestep federal requirements by declining to obtain a license: federal law prohibits the unlicensed dealing in firearms, defined as someone who is “engage[d] in the business of importing, manufacturing, or dealing in firearms.” See 18 U.S.C. §§ 922(a)(1), 923(a). A person is considered “engaged in the business” if they “devote[ ] time, attention, and labor to dealing in firearms as a regular course of trade or business to predominantly earn a profit through the repetitive purchase and resale of firearms.” See 18 U.S.C. § 921(a)(21)(C); see also 27 C.F.R. § 478.13 (2024). Federal law also treats sales to a retail customer differently than sales between licensed dealers. Finally, state law may impose additional requirements beyond those found in federal law, for example by requiring dealers to complete state-specific forms or by extending background checks and other restrictions to sales between private (unlicensed) parties.

This section summarizes how gun sales by licensed dealers to retail customers work under federal law. It first describes sales to customers that live in the same state as the dealer, and then describes variations where a customer crosses state lines to buy a gun from a dealer in a different state. Next, it covers the indicators of illegal behavior that dealers are trained to recognize in order to detect and prevent straw purchasing. Finally, it describes the types of records created and retained by dealers in connection with gun sales, and the potential utility of these records to civil litigants.

Sales to In-State Residents

In a typical transaction with an in-state resident, the customer selects one or more firearms to purchase and then approaches the sales counter to begin the paperwork and background check process. The principal federal form used to record the sale is ATF Form 4473, the Firearms Transaction Record.³²²See 27 C.F.R. § 478.124. ATF revises Form 4473 periodically. The current version of this form as of this writing can be viewed at https://www.atf.gov/firearms/docs/4473-part-1-firearms-transaction-record-over-counter-atf-form-53009/download.

The customer and the dealer each complete portions of this form.³²³Some states have their own form(s) that mirror Form 4473 to varying degrees, and which may be submitted to state authorities. See, e.g., 18 PA. CONS. STAT. § 6111(b)(1) (describing requirements for Penn. State Police Form SP 4-113). Section A identifies the firearm(s) being purchased and is completed by the dealer. The customer then fills out section B, which provides demographic information as well as a list of questions intended to identify whether the customer is disqualified by federal law from purchasing or possessing a firearm, such as whether the customer is under an indictment for a felony or an unlawful user of drugs.³²⁴See ATF Form 4473, questions 9-21. The questions in section B mirror the prohibitions found at 18 U.S.C. § 922(d). Among other things, section B asks if the customer is the “actual transferee/buyer of all of the firearm(s) listed on this form” and cautions:

“Warning: You are not the actual transferee/buyer if you are acquiring any of the firearm(s) on behalf of another person. If you are not the actual transferee/buyer, the licensee cannot transfer any of the firearm(s) to you.”³²⁵Id., question 21(a).

The customer then signs at the end of section B, certifying that their answers “are true, correct, and complete,” and acknowledging that it is a federal crime to make a false statement in connection with the transaction (including, specifically, by falsely claiming to be the actual transferee/buyer of the firearm), exhibit false identification when buying a gun, or deal in firearms without a license.³²⁶Id., question 22.

At this point, the dealer reviews and records the customer’s identification on section C of the form and initiates a background check.³²⁷See id., questions 24-29; see also 18 U.S.C. § 922(t)(1) (describing background check); 27 C.F.R. §§ 478.102 (same), 478.124(c)(1)(iv) (requiring dealer to document background check and response on Form 4473). For many customers, the results of the background check are immediate: either “proceed” or “denied.” For others, the FBI’s National Instant Criminal Background Check System (“NICS”) is unable to provide an immediate response because, e.g., NICS staff require additional time to determine whether potentially problematic information disqualifies the customer from purchasing a firearm. This type of response is called a “delay,” and the dealer must wait three business days before completing the transaction, unless NICS provides a response sooner.³²⁸Under the Bipartisan Safer Communities Act, for putative customers under 21 years of age, NICS may inform the dealer of the need for an additional delay of up to 10 business days to research the existence of potentially disqualifying juvenile records. See 18 U.S.C. § 922(t)(1)(c)(iii).

If the dealer receives an immediate “proceed” from NICS, the dealer may complete section E and sign the Form 4473. If the dealer completes the transaction on a different day (because of a “delay” response from NICS, for example), then the dealer must reconfirm the customer’s identification and the customer must re-sign the form to reaffirm their previous responses in section B at the time the gun is transferred. In either case, when the dealer signs Form 4473, the dealer certifies that it is their “belief that it is not unlawful for me to sell, deliver, transport, or otherwise dispose of the firearm(s)” to the person identified as the customer in section B.³²⁹See ATF Form 4473, at 3. Form 4473 makes clear that the dealer must do more than simply run a background check. The notices and instructions on the form explain that “[t]he transferor/seller of a firearm must determine the lawfulness of the transaction and maintain proper records of the transaction.”³³⁰ Id. The instructions also explain that a gun dealer “must stop the transaction if there is reasonable cause to believe that the transferee/buyer is prohibited from receiving or possessing a firearm[.]”³³¹Id. at 6.

Once the background check requirement is satisfied and the Form 4473 is complete, the dealer can finish the transaction and transfer the firearm. Federal law requires the dealer to retain the Form 4473 as part of its permanent records, whether or not the sale is completed (more on dealer recordkeeping requirements below). Dealers must also log when firearms enter and leave their inventories in “acquisition and disposition” (A&D) records, as discussed below. They may also create a sales receipt and/or record information about the sale as part of their customer records, though there is no federal requirement that they do so. And many dealers now utilize software-based point of sale systems that track sales and help dealers stay in compliance with federal regulations.

If a customer buys more than one handgun from the same dealer within five consecutive business days, the dealer must fill out ATF Form 3310.4, known as a Multiple Sale Report form, by the close of business on the day on which the multiple sale occurs.³³²See 18 U.S.C. § 923(g)(3); see also 27 C.F.R. § 478.126a. A blank version of the Multiple Sale Report form can be found at https://www.atf.gov/firearms/docs/form/report-multiple-sale-or-other-disposition-pistols-and-revolvers-atf-form-33104/download. The dealer must send a copy of this form to the ATF, as well as to the state police or local law enforcement. Additionally, dealers located in Arizona, California, New Mexico, and Texas must also report when customers purchase certain semi-automatic rifles within five consecutive business days.³³³See ATF, Fact Sheet – National Tracing Center (NTC), at 4 (Feb. 2015) (describing Demand Letter 3 program), https://www.atf.gov/file/11046/download. Dealers are required to report multiple sales because of the close association between multiple sales and trafficking: as ATF explains on its website, “[i]f one or more firearms recovered from a crime are part of a multiple purchase, this could be an indicator of potential firearms trafficking.”³³⁴Bureau of Alcohol, Tobacco, Firearms, and Explosives, Reporting Multiple Firearm Sales, ATF.GOV (April 16, 2021), https://www.atf.gov/firearms/reporting-multiple-firearms-sales.

Sales to Out-of-State Residents

The rules are different when a dealer sells a firearm to a resident of a different state. For one, a dealer cannot sell or deliver a handgun directly to an out-of-state resident.³³⁵See 18 U.S.C. § 922(b)(3) (prohibiting FFLs from selling or delivering “any firearm to any person who the licensee knows or has reasonable cause to believe does not reside in…the State in which the licensee’s place of business is located,” except for rifle and shotgun sales under certain conditions). Instead, the dealer will typically take the customer’s payment and then ship the handgun across state lines to a dealer located in the customer’s home state. This process is called an “FFL transfer,” and the dealer in the customer’s home state usually charges a small fee to take delivery and complete the transaction. The dealer in the customer’s home state is the one responsible for filling out and retaining a Form 4473 for the transaction and conducting the background check (along with any other requirement under applicable state law). The dealer that sent the gun across state lines does not complete a Form 4473, but must log the firearm as leaving its A&D inventory records and confirm that the receiving FFL holds a valid license.

In contrast to handgun sales, under federal law, a dealer can lawfully sell a rifle or shotgun over the counter to a resident of another state. This type of long-gun sale proceeds the same way that a sale to an in-state resident would in terms of completing a Form 4473 and conducting a background check—but with one important addition. Under 18 U.S.C. § 922(b)(3), the sale, delivery, and receipt of the rifle or shotgun to an out-of-state resident must “fully comply with the legal conditions of sale in both such States.”³³⁶Id. (emphasis added). These “legal conditions of sale” include both state laws and local ordinances where the customer lives and where the sale occurs.³³⁷See id. (referring separately to “State laws” and “published ordinances”).  The ATF compiles and publishes a list of applicable state laws and ordinances. See Bureau of Alcohol, Tobacco, and Firearms, and Explosives, State Laws and Published Ordinances – Firearms (35th Ed.), ATF.GOV, (Nov. 30, 2023), https://www.atf.gov/firearms/state-laws-and-published-ordinances-firearms-35th-edition. For example, if a customer lives in a state that imposes a mandatory waiting period for firearm sales, the dealer must enforce this waiting period even if there is no such requirement in the dealer’s own state. Nor can a dealer sell a customer a firearm that is prohibited by state or local law where the customer lives, even if it would be legal where the dealer operates. Dealers are charged with knowing the state and local ordinances applicable where the customer lives before they complete transactions with residents of other states.³³⁸See 18 U.S.C. § 922(b)(3).

Red Flags of Illegal Behavior

The background check requirement and other limitations on gun sales described above are intended to prevent the diversion of firearms to criminals, minors, and other persons that the law deems too dangerous to own a gun. Yet prohibited persons do regularly circumvent these restrictions through straw purchasing, by having someone else purchase a firearm illegally on their behalf.

Dealers are generally well-versed in the dangers of straw purchasing, a result of having been trained by ATF and industry groups to detect and prevent it.³³⁹See, e.g., Bureau of Alcohol, Tobacco, Firearms, and Explosives FFL Seminar, South Bend Police Department, Mar. 30, 2023, (“ATF FFL Seminar”), https://everytownlaw.org/wp-content/uploads/sites/5/2024/09/March-2023-FFL-Seminar.pdf; see also “Don’t Lie for the Other Guy, a National Campaign to Prevent the Illegal ‘ Straw Purchase’ of Firearms,” https://dontlie.org/ (accessed March 20, 2024). There are a number of common indicators of straw purchasing that ATF trains dealers to recognize.³⁴⁰See e.g., ATF FFL Seminar at 87-89. Roughly speaking, these red flags coalesce into three categories: (1) indicators of coordination between the straw purchaser and the actual buyer; (2) indicators that the straw purchaser is not a genuine customer buying a gun for themselves; and (3) patterns of suspicious buying activity that suggest gun trafficking or unlicensed dealing.

Indicators of Coordination

• “Scouting” of firearms by someone accompanying the purchaser;³⁴¹Coordination between the straw purchaser and the actual buyer is the paradigmatic warning sign of an illegal transaction. In a straw purchase, the gun is not actually intended for the straw purchaser, and consequently he or she often needs guidance on what firearm(s), accessories, and ammunition to select, and what price the actual buyer is willing or able to pay. Even a single instance of this type of coordination between straw purchaser and actual buyer should suffice in most cases to put a reasonable dealer on notice that the sale is illegal.
• Taking or sending cell phone photos of firearms, or talking on the telephone while looking at firearms;
• Attempting to conceal conversations from dealer employees;
• Money changing hands inside or outside the store;
• Reluctance of the apparent buyer to complete the Form 4473 or other paperwork; and
• Attempts by someone to purchase a firearm that someone else recently tried to buy but was denied.³⁴²Dealers are required to retain Form 4473s for denied sales to assist them (and ATF) in identifying this type of straw purchase, where an associate of a denied customer comes in to buy the same gun. See 27 C.F.R. § 478.129(b).

Indicators that the Straw Buyer is Not a Genuine Customer

• Purchaser has little or no knowledge of firearms;
• No haggling or questions on price;
• Purchaser avoids engaging in conversation with the dealer or is evasive when asked questions;
• Purchaser attempts to buy a firearm that is inconsistent with their stated needs, e.g., buying a small-caliber (.22 LR) rifle for deer hunting, or a small-framed person buying a large pistol for self-defense that appears difficult for them to handle;
• Purchaser appears to be a drug abuser;
• Purchaser marking that he or she is “not the actual transferee/buyer of the firearm listed” on the Form 4473;³⁴³As a former ATF agent explains, straw purchasers often do not grasp that buying a gun for someone else is illegal until the dealer indicates that the store cannot proceed with the sale unless the customer changes his or her answer to indicate that the gun is for him/her. See Aff. of Joseph L. Bisbee, at ❡14, Chicago v. Westforth Sports, Inc., Case No. 21 CH 01987 (Sept. 15, 2022), available at https://everytownlaw.org/wp-content/uploads/sites/5/2022/09/2022.09.13-Brief-Ex.D-Bisbee-Notarized-Aff.pdf.
• Errors on the Form 4473 such as a mismatch between the address written on the form and the purchaser’s identification; and
• Purchases made with new identification.

Suspicious Buying Patterns

• Bulk purchases, either all at once or over a short period of time;
• Repetitive purchases of the same or similar firearms, especially “non-collectibles;”
• No previous purchases but now frequent buying;
• Paying with large amounts of cash;³⁴⁴As explained by a former ATF agent, straw purchasers are often handed cash by the actual recipient of the gun, and will rarely want to use his or her own credit or debit card to buy guns that are not intended for him or her. See id. ❡16.
• Arriving in a car with an out-of-state license plate;
• Traveling an illogical distance to purchase a firearm; and
• Recovery of one or more of the customer’s firearms by law enforcement, particularly if recovery is within a short “time-to-crime” of 3 years or less.³⁴⁵Firearms recovered in connection with a crime are routinely “traced” by ATF; a process in which ATF contacts each federal licensee, beginning with the firearm’s manufacturer or importer, and asks for information about the firearm’s disposition (drawn from FFL records). If successful, the trace proceeds down the distribution chain from licensee to licensee to the dealer’s sale to an unlicensed person (the retail purchaser). When ATF conducts a trace, it does not tell the dealer when, where, or in what circumstances the firearm was recovered. However, a dealer can easily deduce from its own records how much time has elapsed between the sale to the retail customer and ATF’s trace request. If this approximate “time-to-crime” is short—meaning less than three years, but particularly if it is a matter of mere weeks or months—this should put the dealer on notice that the customer was likely a straw purchaser. This should in turn prompt the dealer to deny or contact law enforcement about any subsequent purchase attempts by that same customer.

Straw purchasing can proceed in a variety of ways, and there is accordingly no single factor or combination of factors that always confirms to the seller that a sale is illegal. However, even a single red flag can in the right circumstances suffice to put a dealer on notice, and a combination of red flags even more so. ATF instructs dealers that encounter one of these suspicious circumstances to “Ask Questions, Ask More Questions, [and] Ask Even More Questions!!!” to determine whether or not the customer is a legitimate buyer or a straw purchaser.³⁴⁶See ATF FFL Seminar at 90, supra note 337. ATF also reminds dealers that they are empowered to decline the sale for any reason (including a suspicion that the transaction is not legitimate) and should also report any suspected straw purchasers to ATF.³⁴⁷See id. at 92. ATF concludes its training with the warning to dealers that “[i]f you have reasonable cause to believe it is not legitimate, you must decline the sale.”³⁴⁸See id.

Practice Pointer

If you have any reason to suspect that a firearm used to harm your client was obtained through a straw purchase, this may be a significant basis for liability on the part of the dealer (and potentially others up the supply chain if there is a pattern of illegal diversion by the dealer). It may also be a basis for invoking PLCAA’s predicate exception. Consequently, it is well worth pursuing this potential lead to the extent possible, including through discovery of dealer records outlined in the next section.

Recordkeeping Requirements

The principal record created during a firearms transaction is the Form 4473. These forms contain information that ATF uses to trace crime guns and (separately) during regulatory inspections to assess dealer compliance with the Gun Control Act and other federal laws. Dealers must retain Form 4473s for both completed and incomplete transactions until the business is discontinued and transfer them to ATF’s National Tracing Center if the dealer goes out of business or loses its license.³⁴⁹27 C.F.R. § 478.129(b). Plaintiffs can seek discovery of Form 4473s from dealers during civil litigation, but if the forms have been transferred to ATF they will likely be inaccessible.

The Form 4473 can provide a wealth of information about the sale that is not found in other transaction records. This includes how the purchaser responded to questions about their ability to lawfully purchase the gun, whether they made any errors or misstatements on the form, how the background check proceeded, and which dealer employee was responsible for the sale. There is also space on the form for licensee remarks that on occasion document things like law enforcement contacts in connection with a sale.

As mentioned, another key transaction record is the dealer’s acquisition and disposition book, often referred to as the “A&D book” or “bound book.” Under federal law, dealers must record information about every firearm that passes through their inventory, including the make, model, firearm type, caliber, and serial number, as well as where they bought the firearm and who they sold it to.³⁵⁰27 C.F.R. § 478.125(e). A&D records are typically kept in a bound book like the one seen in the image below, where the first page lists information about the acquisition of firearms, with one firearm on each row (however, more and more dealers are using electronic versions of A&D books). The facing page records information about the disposition of those same firearms on corresponding rows, and thus an A&D book like the one shown is intended to be read across pairs of facing pages. An A&D book can functionally serve as an index of a dealer’s transactions, and it is the only required record that identifies the manufacturer, importer, distributor, or other source that supplied the firearm to the dealer.

For transactions that qualify as multiple-handgun sales, the dealer must also create and retain a copy of the Form 3310.4, which is used to report the multiple sale to ATF and local authorities.³⁵¹27 C.F.R. § 478.126a (“The licensee shall retain one copy of Form 3310.4 and attach it to the firearms transaction record, Form 4473, executed upon delivery of the pistols or revolvers.”). For some transactions, this form may be the easiest way to identify that a handgun is part of a multiple sale transaction—particularly if the buyer bought handguns on different days and thus generated separate Form 4473s for each sale. The Form 3310.4 will also reveal whether the dealer timely reported the multiple sale to authorities.

The dealer may also create and maintain other records that are not mandated by federal law, but which nonetheless may be reached by civil discovery and provide valuable insight. For example, the dealer typically creates a sales receipt showing the purchase price, payment method, and any ammunition or accessories bought alongside the firearm—data points not recorded elsewhere. Some dealers (particularly larger, more technically sophisticated stores) may also utilize computerized customer records or point-of-sales systems that track individual purchasing behavior over time.

Stores often have surveillance cameras to capture activity both inside and outside the premises. These recordings can provide valuable information about customer behavior, particularly coordination with associates that can indicate an illegal straw purchase. These systems often record activity on a loop that automatically overwrites itself after a certain duration, making it difficult to obtain recordings directly from the store given the likely elapse between a purchase and a lawsuit. However, criminal charging documents lodged against straw purchasers regularly reference gun store surveillance footage, indicating that law enforcement obtains these recordings with some regularity while investigating crime guns. If you think law enforcement investigated the purchase for any reason, it may be worth contacting ATF or applicable state and local authorities to see whether you can obtain recordings from them.

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