the difference between cost basis and proceeds, usually referred to as Accrued Market Discount, is generally taxable as ordinary income (entirely ordinary income if you hold to maturity; if you sell prior to maturity there could be some amount of gain in excess of the AMD at time of sale, depending on the market price). AMD will be reflected in Box 1f which reduces your gain when input to Form 8949 (adjustment in col g) and is reported as income on Schedule B. For Treasury Notes this is separate from the coupon interest which will be reported on 1099-INT Box 3.
If you have AMD sales on 1099-B it's best to input them to TT as "one by one" with the details (same with wash sales and non-covered securities), if you make adjustments to sales summaries it will trigger the need to mail the 1099-B to the IRS. The other issue with AMD is it will not be reflected as exempt on your state return due to ambiguities in tax code interpretation (there is nowhere in TT to indicate the AMD relates to a US Gov Obligation), if this is an issue we can get into more details.
For T-Bills there are probably some different ways brokers may report them - the simplest is just on 1099-INT Box 3 as interest and nothing on 1099-B. If they report them as Proceeds/Cost/Gain and AMD on 1099-B instead then there shouldn't be anything on 1099-INT.
Bonds held directly won't generate a 1099-DIV that will only be for Money Market funds where you have to specify the amount of Box 1 that related to US Government Obligations to get the state exemption.
Haven't followed this whole thread, but generally you shouldn't have to 'adjust' anything, brokers should certainly not duplicate reporting of interest; by inputting the 1099-B as provided with Box 1f, TT will take care of the calculations required for Schedule D and B.
If you have more specifics that may be helpful, what the CUSIP is and what amounts you are seeing if there is still confusion between what is on 1099-INT and 1099-B.
