I received my division letter and it states “The undersigned authorizes (leasing agent) to withhold from proceeds of any and all production referred to herein the amount of any tax placed thereon by any governmental authority and to pay the same on our behalf”. Am I misunderstanding this or are they trying to get me to pay their taxes as well?
No, you are correct, even if they won't admit that to you. I just discovered that we are having state income tax withheld from our checks. When I spoke with the state Dept of Revenue about it, (I wanted to know how to claim it on my tax returns since it was not noted on the 1099) I was informed that that deduction was not for MY state income taxes, but for the oil companie's state income tax liability! Then, to make matters worse, after a little digging, I found that the oil company had been granted so many tax breaks that they did NOT in fact have any income tax owing. So bottom line, they pocketed that money. Who is your oil company? Mine is Anadarko. I am going to try to fight this because this clause was not in our lease and I don't know how they get away with forcing us to comply with it.
I would suggest you call your state representative and scream, but they are all so bought that it probably won't do any good.
Linda
Linda, thank you for your information! this is infuriating, I know that they put up the $$ to dig in the first place but they did that only because of the huge return on the investment! I am going to call them on it tomorrow. I live in Alabama now and hope " oil pockets" have not reached here. I will post any info that may help anyone to avoid this happening to them.
Joann