Actually this only applies if the person receiving the weapon is otherwise prohibited from owning it. However, the BATFE has been known to be rather enthusiastic about prosecution without all the requirements for a violation being met. Even if both parties are as pure as the driven snow, it is something to be cautious about. Since there are over 20,000 Federal, State and Local gun laws on the books it is easy to run afoul of a local or State law even if you are not violating a Federal law.

"The records kept by FFLs also enable the ATF to trace firearms recovered by LEAs to learn when those firearms were purchased and by whom. According to the ATF, less than 5 percent of firearms are used in violent crimes by the person who originally purchased the gun from an FFL. Guns used in violent crime are generally acquired through a secondary market of traffickers and "straw purchasers" (individuals that buy firearms for prohibited individuals).20 Nonetheless, tracing is a significant investigative tool because it can provide investigators leads to the subsequent purchaser(s) of the firearm."