Why is one of my producers charging deductions from 2015 on a current royalty check? And there is no current production.
I would certainly call and find out. Have your original lease in your hand when you call. Is this a new operator versus an old one? Do you have a no deductions lease?
I had that happen last year. It was a new operator on a very old lease, preceding my time as manager of our holdings, and I didn’t even have a copy of the lease. However, when I questioned the charges, they checked their copy of the lease and found out it did have a no deductions clause, even back then. They stopped the deductions for the future, but as far as I can see, they never refunded the inappropriate deductions. So it’s on my to-do list to verify that and then send the (un)necessary letter by certified mail. Sigh.
Many of the companies use accounting software that automatically deducts for the post production charges. Most people don’t really read the leases they sign… Many times, you just have to have your lease in hand and tell them what it says and they will make the changes. The tax deductions are usually okay, it is the post production charges that you want to watch out for.
I haven’t seen any problems with the severance taxes. In my spreadsheet, I calculate the percentage deducted for that just to keep an eye on the amounts. But I do have a problem with Oklahoma withholding taxes. With each new operator, I have to convince them that, as an Oklahoma LLC, I’m required by law to be the withholding agent for Oklahoma income tax for our non-Oklahoma-resident members (which happens to be everyone in the family). I wish there were any easier way to demonstrate this to them, and intend to contact the Oklahoma Tax Commission (when I get a Round TUIT 
) to see if there’s a form they can provide.
From 6 years ago? Why is there tax when no production?
I can’t speak for the original questioner in this thread, but in my case there was production, and I had been paid for it, with no deductions. The thing that happened last year was that they reduced the amount of a present payment by all the deductions they suddenly thought should have been taken out before.
What well is it? Or what section, township and range?
I didn’t mean to suggest that my example was the same as ZFL’s (the original questioner), only that it was a similar pattern. My particular example was a Texas oil company, six wells in Hidalgo County, Texas, and not stretching back nearly as far as six years. Sorry if I muddied the water.
Rudy
Graham 1-22 and 2-22 Carter, Sec 22 2S 3W. Well 2-22 stopped production in 2015.
Find your original lease and call the operator and ask why they are making deductions.
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