The first select does not create a table with name TranCodes but just a recordset that is not accessible from T-SQL. You can either create a temp table, put result into a table variable or use derived table as shown below

SELECT *
 	FROM Transactions
	WHERE sTrans_Type_CD IN
		(SELECT DataItems FROM SELECT * FROM udfParseCommaListToTable(@sTransTypeCodes, ','))

>I wrote another UDF to convert a comma delimited list of string values to a table. When I call it, I get "Invalid object name 'TranCodes'". The error is occurring on the last query:
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>DECLARE @sTransTypeCodes varchar(50)
>SET @sTransTypeCodes = 'PR,PD'
>
>SELECT * FROM udfParseCommaListToTable(@sTransTypeCodes, ',') AS TranCodes
>
>SELECT *
> 	FROM Transactions
>	WHERE sTrans_Type_CD IN
>		(SELECT DataItems FROM TranCodes)
>