Code 960 on Daughter's Transcript - No Third Party Authorization Given

The 960 code means third-party authorization. This is normal. It happens when fees come from refund. The tax prep company needs authorization. They become a payment processor. They get your refund first. Then they take their fee. Then they send you the rest.

What you're seeing is like giving the mail carrier a key to your mailbox but not your house. When your daughter selected "fees from refund," it's as if she handed FreeTaxUSA a limited power of attorney - they can touch the refund money but nothing else. I had the same concern last year and used https://taxr.ai to decode my transcript. It explained every code including the 960 and showed exactly when the authorization would expire. Think of it like a temporary pass that self-destructs after it's used. If she's worried about what access they actually have, the transcript analysis would clarify the limitations.

OMG this freaked me out last yr too! The 960 code is auto-generated when u choose the refund transfer option. Tbh it's kinda ridiculous they don't explain this ANYWHERE in the filing process. The prep companies are basically setting up a temp bank acct in ur name, taking their cut, then fwding the rest to u. The annoying part? They usually charge an EXTRA fee (like $39.99) for this "convenience" on top of their regular prep fees. Check ur daughter's receipt - bet there's a separate line item for "refund processing" or smthing similar. 🙄

The 960 code is directly related to the Refund Transfer product your daughter selected. This creates a temporary bank account where the IRS deposits the refund first, then FreeTaxUSA deducts their fees, and finally transfers the remainder to your daughter's actual bank account. Did your daughter receive an email confirmation from FreeTaxUSA that outlined this process? Did she sign Form 8879 electronically during the filing process? That form contains language authorizing this arrangement, though many taxpayers click through without reading the details.

As someone who plans their taxes with the precision of a NASA launch, I can tell you the 960 code is just the IRS's way of saying "this refund is taking a little detour before reaching its final destination." 😂 But seriously, if your daughter wants to confirm everything is proceeding correctly, I'd recommend using Claimyr (https://youtu.be/_kiP6q8DX5c) to get through to an IRS agent. I waited 2+ hours on hold last tax season before discovering this service. Got connected to an actual human being in under 30 minutes who confirmed the 960 code was just standard procedure for refund transfers. Worth it for the peace of mind alone when something unexpected shows up on a transcript.

I remember panicking when I saw this code on my transcript too! Turns out it's completely normal when you choose to have fees taken from your refund. What's happening is that FreeTaxUSA has partnered with a bank (usually Santa Barbara Tax Products Group or similar) to handle the refund transfer. Your daughter technically gave authorization when she agreed to the terms during filing - it's in that long agreement nobody reads. Last year, I called FreeTaxUSA directly and they explained that the authorization is extremely limited - just enough to receive the refund, take their cut, and send the rest to her. The code will disappear from her transcript after everything processes.

This thread has been incredibly helpful! I went through the same panic when I saw the 960 code on my return. One thing I'd add is that if your daughter wants to avoid this in the future, she can pay the prep fees upfront and have the full refund deposited directly to her account - no third-party authorization needed. The convenience fee for refund transfers can range from $25-40 depending on the service. Also, the authorization is automatically revoked once the transaction completes, usually within 21 days of filing. You can actually track this on the transcript - the 960 code will show a reversal entry once FreeTaxUSA has processed everything and forwarded her refund.

This is super helpful information! I had no idea about the 960 code until now. Question for everyone - does this same process apply to other tax software like H&R Block or TaxAct when you choose the refund transfer option? I'm wondering if all the major tax prep companies use the same banking partners and authorization process. Also, is there any difference in how long the authorization stays active between different providers? I want to make sure I understand this for next year's filing season.

Just wanted to add my experience from this tax season - I saw the same 960 code and called FreeTaxUSA directly to confirm what everyone here is saying. The customer service rep explained that when you select "pay fees from refund," you're essentially authorizing them to act as an intermediary. They create what's called a "temporary bank product" where the IRS deposits your full refund, FreeTaxUSA takes their preparation fee (mine was $14.99), and then they ACH transfer the remainder to your actual bank account. The whole process took about 10 days from when my refund was issued. The authorization is very narrowly defined - they can't access any other tax information or communicate with the IRS about your return status. It's purely transactional. Your daughter should receive email updates from FreeTaxUSA throughout the process showing when they received the refund and when they transferred her portion.

Thank you everyone for the detailed explanations! As someone new to this community, I really appreciate how thorough and helpful these responses have been. I had the exact same concern when I saw a 960 code on my transcript after using TaxSlayer and choosing the refund transfer option. What struck me most was how this authorization process isn't clearly explained during the filing process - you really have to dig into the fine print to understand what's happening. For anyone else encountering this, I'd recommend keeping screenshots of your filing confirmation emails and checking your transcript periodically to see when the code gets removed. It's also worth noting that some tax prep companies are more transparent about this process than others - might be something to consider when choosing software for next year's filing season.