Waterhouse, I'm going to post the text of the ATF transcript for which hso posted the link, above:
http://www.atf.gov/firearms/ffrrg/transcripts/ltfour.htm
Note in particular the "Narrator" section at the bottom.
STRAW PURCHASE ATTEMPT
BOBBY
That’s it, Mr. Thomas, the black one—right there.
MR THOMAS
Okay, I see it.
CARLA
Can I help you with something?
MR. THOMAS
Yes, we’ll take that one right there.
CARLA
You’re Mr. Thomas, right?
MR. THOMAS
Yes, I am.
CARLA
Is this your son?
MR THOMAS
No, this is my neighbor Bobby.
MR. LUCAS
Can I see you for a minute, Carla?
CARLA
Sure Mr. Lucas. What is it?
MR. LUCAS
Do you think we should sell that gun to Mr. Thomas?
CARLA
I don’t think that it would be a legal transaction. It looks like Mr. Thomas wants to buy the gun for Bobby, who is obviously underage. Also, Mr. Thomas isn’t Bobby’s parent or guardian.
MR. LUCAS
You’re right. There are two problems here. First, it looks like Mr. Thomas might be attempting to make an illegal “straw purchase” on Bobby’s behalf. Second, since Bobby is obviously under 21 it is unlawful for Western Arms to sell him a handgun. Whenever you doubt the legality of a firearms acquisition, you should deny the transaction. In this particular case, we’ll deny the sale.
CARLA
I’m sorry sir, I can’t sell you the handgun. You appear to be buying the gun for Bobby rather than for yourself. Also, I am prohibited under Federal law from selling a handgun to anyone under the age 21. This transaction is illegal.
Here’s a pamphlet with more information about some current federal handgun laws.
MR. LUCAS
Good work Carla. You handled that well.
CARLA
Do straw purchases only involve underage customers?
MR. LUCAS
Not always. A straw purchase is a purchase in which the actual purchaser uses someone else—a.k.a. the “straw person” to make the purchase and complete the paperwork. Generally straw purchasers are utilized because the actual purchaser is not eligible to conduct a transaction because they’re in one or more legally prohibited categories, such as being addicted to a controlled substance, being a felon, being underage, and so on.
However, a straw purchase occurs even when the actual purchaser is not a prohibited person. The crime committed is knowingly making a false statement on the Form 4473 indicating that the straw purchaser is the actual purchaser, when this is not the case.
Felons, who are also prohibited from conducting a firearms transaction, will sometimes attempt to obtain guns this way, because they wouldn’t pass the NICS background check and could not truthfully fill out Form 4473. If, however, Bobby was with his father or other legal guardian, and his father was legally eligible to obtain the handgun as a gift for Bobby, his father would fill out Form 4473, undergo the NICS check, and assume legal responsibility for the transaction and the gun. Bobby’s father could truthfully complete the form 4473 to indicate that he is the actual purchaser because he would take title to the weapon and then transfer the firearm to Bobby as a gift.
CARLA
What if a customer who qualifies to own a gun buys a firearm as a gift for someone else?
MR. LUCAS
The same rules apply. A transaction is legal as long as the person who fills out form 4473 does so truthfully and completes it as the actual purchaser. In that particular situation, we usually like to make sure they are aware of the rules associated with ATF I 5300.2. Again, you should feel comfortable denying the purchase if you think the customer is being dishonest in any way.
CARLA
Suppose Bobby wanted to buy something other than a handgun, like a rifle or a shotgun? Would he still be ineligible?
MR. LUCAS
Bobby would have to be 18 or older to buy a long gun from a Federal firearms licensee. Even then, if he can’t provide the appropriate photo identification, or if you believe he’s misrepresenting himself, you should deny the sale.
NARRATOR
Keep in mind that a straw purchase is a purchase in which the actual purchaser uses someone else—a.k.a. the “straw person”—to purchase the firearm and complete the paperwork. Generally, the straw purchaser is used because the actual purchaser is not eligible to conduct a transaction because he or she is a felon or other prohibited person. However, a straw purchase occurs even when the actual purchaser is not a prohibited person. The crime committed is knowingly making a false statement on the Form 4473 indicating that the straw purchaser is the actual purchaser, when this is not the case. Additionally make sure you familiarize yourself and anyone who purchases a firearm as a gift with the rules associated with the ATF I 5300.2 pamphlet.