Federal return rejection Reject Code F8960-019-04 Processing error Form 8960, Net Investment Income Tax. We do not have an estimate for when the problem will be resolved

[BligBlueLaser]

@Phish Fan 

That would trouble me. My desktop application (Mac) shows a big red "Rejected" for all three of my returns (Fed due to error, 2 states due to Fed rejection). You might have a case where contacting TT support is worth the time...

[askques]

Yes, this is the problem! I have $36 in "business income." TurboTax puts it in line 4a on Form 8960 where, according to the above post, it's supposed to go. But, it's not rental income. Let's hope the IRS fixes this by February 5. It looks like I'm not the only person affected 🙂

[alexclaytor]

@BligBlueLaser- why contact TT support, just so they can be referred back to the community forums for a fix for that problem too lol

[BligBlueLaser]

@alexclaytor

😂😂😂😂😂

[lmp7677]

Did you look at last years taxes? I don't have any rental property either and a form was generated. I looked at last years taxes and it was also generated and accepted without any rental property. That's what makes me think its and IRS error. The Error code is an IRS code. 

I just looked on the irs website and there is a downloaded spreadsheet of known errors and solutions. This is listed there

Tax Year 2022 Production Known Issues and Solutions
Updated 01/25/2023
Date entered	Form Type	Issue Type	Description of the Problem	Solution(s)	Projected Resolution Date	Date Resolved	Status

1/17/23

Form 8960

Business Rules

Business Rules F8960-019-04 and F8960-003 may cause returns to erroneously reject. These business rules need to be modified to reflect the updates to the Instructions for Form 8960 (Tax Year 2022) regarding the Specific Instructions for Line 4a to include Schedule C (Form 1040) amounts reported on Schedule 1 (Form 1040), line 3 and Form 1041, line 3.

Business Rules F8960-019-04 and F8960-003 will be updated in early PY2023.

2/5/23

OPEN

[lmp7677]

I just looked on the irs website and there is a downloaded spreadsheet of known errors and solutions. This is listed there

Tax Year 2022 Production Known Issues and Solutions
Updated 01/25/2023
Date entered	Form Type	Issue Type	Description of the Problem	Solution(s)	Projected Resolution Date	Date Resolved	Status

1/17/23

Form 8960

Business Rules

Business Rules F8960-019-04 and F8960-003 may cause returns to erroneously reject. These business rules need to be modified to reflect the updates to the Instructions for Form 8960 (Tax Year 2022) regarding the Specific Instructions for Line 4a to include Schedule C (Form 1040) amounts reported on Schedule 1 (Form 1040), line 3 and Form 1041, line 3.

Business Rules F8960-019-04 and F8960-003 will be updated in early PY2023.

2/5/23

OPEN

0

Reply

[lmp7677]

I just looked on the irs website and there is a downloaded spreadsheet of known errors and solutions. This is listed there

Tax Year 2022 Production Known Issues and Solutions
Updated 01/25/2023
Date entered	Form Type	Issue Type	Description of the Problem	Solution(s)	Projected Resolution Date	Date Resolved	Status

1/17/23

Form 8960

Business Rules

Business Rules F8960-019-04 and F8960-003 may cause returns to erroneously reject. These business rules need to be modified to reflect the updates to the Instructions for Form 8960 (Tax Year 2022) regarding the Specific Instructions for Line 4a to include Schedule C (Form 1040) amounts reported on Schedule 1 (Form 1040), line 3 and Form 1041, line 3.

Business Rules F8960-019-04 and F8960-003 will be updated in early PY2023.

2/5/23

OPEN

[gregkzn]

I guess the IRS really does need all those 87,000 new agents. This is so disgusting that we have these issues. 

[gregkzn]

I called 2 days ago and the "Tax Expert" I talked to didn't have a clue.

[kristipalmer]

Although the solution posted above references an IRS issue, there is a TurboTax issue as well.

per IRS instruction, for 8960 should match Line 14 on Schedule A.

in my return, no Schedule A was generated.

It’s not clear to me that form 8960 is necessary or appropriate for my small business. But if Turbo Tax generates this form, then they should be responsible for generating the companion form (Schedule A) so that the eFiling is accepted.

When will this be resolved?

[Lawdude2222]

Just got off the phone with TT support and he said it's a known issue, they are getting endless calls about it, and they dont have a date yet as to when it will be fixed.  It's shocking that a known issue isn't raised to our attention via email.  Horrible.   We need to ask for partial refund on the product. 

[kingmk888]

Thanks for this detailed reply. It inspired me to bite the bullet and redo my filing. I used H&R block's solution and on the 1st try, it was accepted (within 1 minute of filing no less). I think TT, which I've used for the last several years just didn't own up to their issue nor provide enough options for resolution. If they had refunded my money, I'd likely come back. But very unlikely now... I hope all of you get your taxes filed successfully.

[ScottSMN]

I'm in the same boat; however, I am going to hold off rather than file paper. If you go to the link that was posted regarding known issues and click on the one and only line for 2022, you will download a Macro-enabled  Excel spreadsheet. Filter column B using 8960.

Business Rules F8960-019-04 and F8960-003 may cause returns to erroneously reject. These business rules need to be modified to reflect the updates to the Instructions for Form 8960 (Tax Year 2022) regarding the Specific Instructions for Line 4a to include Schedule C (Form 1040) amounts reported on Schedule 1 (Form 1040), line 3 and Form 1041, line 3.

It also states, which I wanted to confirm, that the Projected Resolution Date is February 5th.  It was logged by the IRS on January 17th. This effects every schedule C filer so I would hope this is a priority for them.

The IRS' website gives the following information regarding paper vs electronic filing.

If you file a complete and accurate paper tax return, your refund should be issued in about six to eight weeks from the date IRS receives your return. If you file your return electronically, your refund should be issued in less than three weeks, even faster when you choose direct deposit.

Let's say the IRS fixes it later than projections; like 10 days late. That's two weeks plus an assumed three weeks  (says in less than) you will wait for it to be processed and deposited in your account. Five weeks.

Paper file and you are looking at six to eight week once they get it. What I would hope is a worst-case e-filing timeline vs the best-case paper filing is 7-10 days earlier.  

In the meantime, my suggestion to all is send your senators and your representative a note demanding that the IRS immediately address the know error in e-filing business logic for form 8960. Anyone who earned money from work done outside of a W-2 (contractor, side-hustle, etc.) will be prohibited from e-filing until this is resolved.

[bculberson1]

Yes, I had a 1099-NEC and receiving an error with form 8960. Pretty ticked with TT if they knew there was a issue and charged me to file anyway when they knew they couldn't. Seems sketchy af.  After many years with TT, I'm moving on.

[ScottSMN]

<Note - I hadn't scrolled all the way through comments when I posted this so I hadn't seen that others followed the path>

For curious minds:

Let me add a little context here. Em53's comment about a it being on the IRS side AND the February 5th date are correct. I had my doubts at first but I confirmed the most critical aspect of her response. To ease some of the concerns I have seen posted here, let me fill you in with the following.

• Look at Em53's link in her post. It takes you to the IRS's know issue page. What might have helped clarify things is that there is an extra step. Click on the one and only line for 2022 issues. You will download a spreadsheet. At least at the time of writing this, page down to line 74. Cell B74 should have Form 8960. If you know how to use filters, you can filter column B using the text 8960. The error is listed as Em53 stated it was along with the February 5 Projected Resolution Date.
• Calling into the IRS will not help. The people offering assistance are doing so based on the tax code and forms. This issue is an electronic filing business logic error so as far as they are consider, the forms are right. If you were manually doing your return, this problem would not exist.
• Think like a computer for a second. Turbo Tax and other provides have the software to correctly prepare your return. I though for sure this was a programing error on their end, but it is no. When the return is file, data is mapped for the IRS. Companies send those files and the IRS has logic to take data point A and put it in the field 00001 on their side. When the IRS checks your return data, they have an error in the business logic that rejects the return because they are missing another piece of data that they have, but didn't consider.
• If you are hanging in there, money earned from a sole proprietor or partnership, has to be defined as either active or passive. Remember where you check the box about "Materially Participate" in the business as well as noting that the investment is "At risk" if there is a loss (32a)? That's the method by which the IRS is going to classify your income reported on Schedule C. If you lost money, the At Risk tells the IRS that you can net the loss against other ordinary income. Still awake?
• One thing EM glossed over in her opening. The 8960 line 4a AND 4b are designed to total up business activities, like being a landlord, contractor, etc. and then take the (and I hate this word) nonpassive activities out. The IRS' process is seeing an amount in line 4a and freaking out because it assumes this is from rent. So even the the form shows the hokey-pokey of your schedule C money, it can't get over the fact there is no Schedule E income. That is what the IRS has to fix and you would think that shouldn't be a big deal.