I received 4 separate 1099's this year for our family; some were for royalties, and some were for right of way.
They were ALL incorrect. Some were exactly DOUBLE what they should have been. Upon calling the Devon Hotline, they indicated they had 1099 problems, and would be correcting as soon as possible.
Just a heads up.
Forgive them for they know not what they do. Devon's royalty accounting department sends out an automatic response e mail. After that, you will never hear from them. When they were in communication, all they would say about the deductions for "compression and transportation" was that the law allows them to take those deductions. I don't think they ever bothered to read the lease. Talking to them is like talking to a marshmellow.
I received a "corrected" 1099, but it was still wrong.
They were supposed to pay us for the electrical lines they strung to electrify some wells. Almost a year later, a family member made a stink about. I received a check for thirty dollars worth of damages; the letter said fifty dollars.
They still haven't paid me for the lines on some wells to the west.
I think we have had enough of Devon. I put them in the same category as Chesapeake.
Sounds like a sneaky way for them to claim more write-offs on their taxes to the IRS, and you get stuck with having to pay THEIR taxes on the difference between what they paid you and what they told the IRS they paid you. Keep as much documentation as you can about the true amounts that they paid you, as well as documentation wherein you requested that they send you a corrected 1099. Unbelievable.
If an oil company engages in a systematic defrauding of mineral owners, does it qualify as a "continuing criminal enterprise" under RICO statutes? If so, there could be profound consequences for the company management and the stock holders. The company, the assets of the management team and all other assets derived from this criminal activity could be subject to seizure.
If the case is proven, those defrauded would be entitled to treble damages.
Maybe I'm being overly suspicious, but you know, I have lived long enough to know a few things about the evil that the human species can do. One mineral broker allegedly lost millions of dollars in contracts for billing their client, a very large oil-and-gas producer, for phantom landmen, landmen that literally DO NOT EXIST, which to me sounds like not only a civil lawsuit for breach of contract but also felony criminal charges for theft by deception, fraud, etc. I won't mention the parties involved because I have no idea if the allegation is true.
So it is certainly within the realm of possibility that on a 1099 to the IRS a company might "accidentally" double the amount of income that a royalty owner supposedly received so that the royalty owner would have to pay some of the operator's federal income taxes. I follow Ronald Reagan's maxim: "Trust, but verify." I compare all of my 1099's, not only for royalties but also for business and personal income, to amounts actually received. A couple of times, the numbers did not match, but I did not complain because the amounts were negligible (less than $50, meaning the actual additional tax I was obligated to pay was only about $10-15). But if there were a big number involved, there is no way I would pay.
I had a lessee send me a 1099 for a lease bonus I never received he knows I never received because I am suing him. Reported it to the IRS and haven't heard from them to date.
Presumably you had to sue them because they would not fix their mistake. Unbelievable.
I am suing them because they never paid me recorded the lease and then assigned it.
Better living through creative accounting.
You're an attorney, right? So you would know not to sign the lease without a check or bank draft in hand. Dare I assume that the check or bank draft never cleared and they went ahead and recorded the lease? Wow, if that's true, that's chutzpah. Care to specify the wrong-doer?
I'm not an attorney. My attorney would probably have a fit if I identified the wrongdoer at this moment. You are correct that the draft was never honored. The lease recorded after the expiration. It was in my early dealing with oil and gas, actually happened to me twice before I decided I really needed to learn what is going on. The other lessee with a similar situation released the lease, after I told them there would be no more talk of a ratification or a new lease and the suit would be filed by the end of the week, and I am very pleased to be unleased under the 6 wells that they have drilled to date. I don't think the other non payer really believes that I will drag them through literal hell, spend every dime I ever make off the minerals, if it will cost them the same, hopefully more. I am actually moving to North Dakota, just so I can be right there. Jury of nine, I wish it was then now.
R W ,
You will be lucky if you only spent what you made off the minerals. This will be my 3rd suit with oil companies that have messed up my title to my minerals and thank heaven I have other income to pay the attorney's and court cost. I have never made a penny off any of these cases, but it sure did cost me. The first 2 suits where settle out of court, so it only cost me a few thousand more than what the leases and wells made. The last one is with a really crooked oil company and I have already spent more than the well made in the last 10 years. Now I'm buying the investor out, one by one. I do not believe in suing companies/people, but a person has to protect what they own and keep the titles clear.
I think all large oil companies have the same problems. Chesapeake, Devon and add Continental Resources.
I have wrote & called Continental R asking them to file a release of my lease at the Co clerk office just like my lease stated. You guessed it. They don't do that. I sure hope I don't have to enforce my expired lease with them. They said the next company will clean it up. Like H--- they will. At my cost again.
Now in today's Ft. Worth newspaper, it said that the earthquake in Oklahoma were probably caused by injecting water into a well, That is all we need. What little we have left will probably go down a sink hole.
On 1099, I had a company out of Dallas and Houston that never did get it right. Finally gave up and had the CPA make notes that we sent with my Fed. taxes. Never did hear from the Tax dept. Guess they were happy to get their money and could care less about the oil companies mistakes.
R W ,
Sorry to hear you are moving back to N D, did you forget about the winter up there?
Just love when you mail your taxes in and then the next day, a corrected 1099 comes from Devon. You just can't trust anyone. Shame on me!
Virginia, it will all work out in the end, one way or another. I think I have a good chance of kicking them off my lease because they recorded late and never paid they seem to be hanging their whole defense on saying subject to title gives them an infinite amount of time to accept and pay or not and a copy of an unsigned check, that is really weak. If I can give them the boot, I'm not fighting over 20% royalty but ownership, it makes a bit of difference. The lessee is not that big of a company either.
It's not a permanent move to ND. Family have said if I don't visit them they will spit on me. I will not be staying with them, they can talk your ear off at any time but after they have been snowed in for so long, I know I couldn't take it. Probably shock them because like Gary Cooper, I believe that "yep" can be a paragraph.