Taxpayer privacy
The transfer paperwork is nominally a tax return; the purpose of the registration, and the National Firearms Registration and Transfer Record (NFRTR or Registry) is keeping track of who owes the tax. Taxpayer privacy laws apply to a transfer form, and ATF may not discuss a pending transfer with anyone but the taxpayer. They sometimes claim that the taxpayer on a tax paid transfer is the transferor (seller), as he is responsible for the tax by law. This also serves to allow ATF to refuse to discuss why a transfer is taking so long with the party who is most interested in that question, the transferee (buyer). However, in another context (releasing information under the Freedom of Information Act) ATF has decided that as to a Form 4, the tax form is a joint return between the transferor and transferee (see 1980 memo re Auto Ordnance Corp. FOIA request on my web page). The transferee should be entitled to the information about the status of the application on the same basis as the transferor. That is not ATF's usual practice, however with pending transfers.
These taxpayer privacy restrictions do not apply to disclosure of the form by other persons whio might have access to it, a local LE chief who provided the certification, for example, and retained a copy of the form. Nor do they apply to a court ordered disclosure by anyone who might have a copy (buyer or seller for example), by subpoena or similar measure.
The NFA law also prohibits the use of Registry information obtained from natural persons (only) for any law enforcement purpose except prosecutions for making a false statement on a transfer form (26 U.S.C. sec. 5848). Other tax laws prohibit the release of transfer information by the Feds, as a tax return, except for certain narrow law enforcement type circumstances. See 26 U.S.C. sec. 6103. The Feds may not legally disclose whether someone has a registered NFA firearm, or not, to any state or local law enforcement agency or personnel.
However, as most NFA weapons are also regulated by the GCA, purchases from a dealer in NFA weapons requires the completion of the standard 4473 yellow form, as well as dealer bound book records, and this source of information is not so similarly restricted. ATF may release this information to local law enforcement for a host of law enforcement purposes. See 18 U.S.C. sec. 923(g)(1)(D).
