Have you tried reaching out to your local Taxpayer Advocate Service? They might be able to help if you're having trouble getting through to the IRS directly.

@Brady Clean mentioned the Taxpayer Advocate Service - that's actually a great suggestion! I used them last year when I was stuck in a similar situation. They're like a lifeline when the regular IRS channels aren't working. You can find them at taxpayeradvocate.irs.gov or call 1-877-777-4778. They're specifically designed to help when you're having problems getting through normal channels. Worth a shot before paying for third-party services!

Code 960 can definitely be stressful! I went through this same situation about 8 months ago. In my case, it was triggered by a discrepancy with my W-2 wages that my employer had to correct with the IRS. The whole process took about 14 weeks, but I did get my full refund plus interest like others mentioned. One thing that helped me stay sane was setting up an IRS account online so I could check for updates weekly instead of obsessively checking daily. The transcript will update with new transaction codes when things start moving again. Hang in there - the waiting is the worst part but most 960 cases do resolve successfully!

I'm going through the exact same thing right now! Got code 960 about 5 weeks ago and it's been radio silence since then. Reading everyone's experiences here is actually making me feel a bit better - at least I know I'm not alone in this waiting game. The interest payment is a nice consolation prize I guess, but man I really needed that refund for some unexpected car repairs. Has anyone here tried calling the IRS directly about a 960 code or is it pretty much just a waiting game until they're done with their review?

What software are you using? I had the same confusion with TurboTax but they have a section that explains this. They specifically say that yes, NIIT is an additional tax on investment income - so your understanding is correct.

You're absolutely correct - this is indeed how the NIIT is designed to work! I went through the exact same confusion when I first encountered Form 8960. It does feel like double taxation because, in a way, it is. Think of the NIIT as a separate Medicare contribution tax that kicks in for higher-income earners. Your investment income gets taxed once as part of your regular income tax (on lines 2b and 3b of Form 1040), and then if your MAGI exceeds the threshold ($200K for single filers), that same investment income gets hit with an additional 3.8% tax. Your calculation looks spot-on: $20,250 in net investment income × 3.8% = $769.50. This is completely separate from and in addition to whatever regular income tax rate you're paying on that same $20,250. It's frustrating, but it's been the law since 2013 as part of the ACA. The good news is you're filling out the form correctly - many people get tripped up thinking they made an error when they see this "double taxation" effect for the first time.

I got audited last year because I tried to claim my state pension contributions as a deduction on Schedule A. Don't make my mistake! The IRS agent explained that mandatory pension contributions are already reflected in the reduced amount in Box 1 of the W-2, so trying to deduct them again on Schedule A was essentially double-dipping.

This is such a helpful thread! I'm also a government employee and was confused about this exact issue. Based on what everyone is saying, it sounds like I should look at Box 1 of my W-2 and compare it to my actual salary to see if my pension contributions are already being handled pre-tax. I appreciate everyone sharing their experiences with the various tools and services - it's reassuring to know there are resources available when HR departments aren't always the most helpful with tax questions. One question though - does anyone know if this same principle applies to federal employees with FERS contributions, or is that handled differently than state pension systems?

I went through this exact situation with my daughter's ITIN. Here's what worked for me: 1. First, call the dedicated ITIN unit at 1-800-908-9982 2. Have your tax return info ready - they'll ask for the tax year and your information 3. Request a status check on the ITIN application 4. If they can't find it, ask if you should submit Form 4506-T to request verification 5. If no record exists, you'll need to reapply with a new W-7 6. When reapplying, consider using a Certified Acceptance Agent (CAA) who can verify your original documents 7. This prevents sending originals to the IRS The whole process took about 6 weeks once I reapplied properly.

I had a very similar experience with my nephew's ITIN application in 2022. What I learned from calling the ITIN hotline is that sometimes the applications get "suspended" in their system when there's a minor documentation issue, but they don't always notify you about it. In my case, the birth certificate copy I submitted wasn't clear enough, but instead of rejecting it outright, they just held the application in limbo. The agent was able to tell me exactly what was missing and I resubmitted just that document. Got the ITIN number about 8 weeks later. Definitely call 1-800-908-9982 first before doing anything else - they can see the status even if you never received any correspondence from them.