In short: Inherited a %age of an investment in some EQT gas/oil wells. None of the math is adding up. Don’t know who exactly to help advise? A specialist lawyer? Accountant? Private investigator?
Our current lawyer just doesn’t understand and says it’s confusing to him as well.
We’re supposed to receive quarterly checks but received one last year, and one mid spring for last year after a lot of prompting/questioning.
More detail:
The person heading the company keeps going to florida and postponing sending us paperwork and tax information… finally got some spreadsheets and tax forms, but none of the numbers are matching up.
(Ex: a spreadsheet says both my brother and I have 4.25% interest, but in the official tax form it says 2.4%) — the tax form for what they were sent from the oil well to be split among the investors gives a total that doesn’t seem to wind up with what we were paid out, at all.
There’s a mystery “deductions” column in their spreadsheet, and then on top of that apparently they deduct $1200/yr for filing the taxes. Which they filed late, end of may this year, after serious prompting, and sent an extra check, and I had to re-do my filing.
So the breakdown is like…
Last year’s tax form from gas well: $81,306K
Our percentage according to their paperwork: 4.25% each
The percentage listed on our tax forms: 2.4%
They deduct $1200 for taxes anually
We saw a very simple spreadsheet with colums for the $81,306K total, ‘netted JTB charges’ $2664, $32674K in ‘deductions’, net $45867.
Checks we received for last year: $830 and $140 (so even at 2.4% and 4.25% it doesn’t add up?)
We are told this year there is no output from the gas wells, is it possible to check up on that on our end?
You can look up the production of wells on your state’s natural resource website. Many gas wells have been shut in part of this year due to low gas prices to save the resource in the ground until prices go back up.
There are forensic accounting groups that do that sort of review. If you list your state, someone on the forum may be able to recommend a company.
Are you a working interest owner or a plain royalty owner? Working interest owners will have deductions taken out of their checks as well as state taxes. If you are a royalty owner, the terms of your lease will determine what deductions are allowed. Depending upon your state, you should have a Division Order for the wells and a clear Joint Interest Billing statement if you are a working interest owner.
I did just get a login on energylink and confirmed the JIB and revenue amounts (none for this year so far) — I guess i’m really curious about the tax form itself? Why the listed percentage of the total interest would be different on the 1099 from what it is in the system/what our actual interest is?
The first thing I would do is contact the Division Order analyst at the operator and see what they are carrying for you. Send a certified letter return receipt so you have a paper trail. Give them your owner number. They have the title information. The accounting department would be next after you get your first set of information. Sometimes, the two departments might be in different countries and have differing information that needs to be straightened out.