What can be done with a company that won’t correct a problem? The YTD payments on my checkstub is higher than what I’ve been paid. The company, FX Energy, has acknowledged that there is a problem with their software but have done nothing to resolve the issue so now the 1099 that is sent will not match the payments I received.
Wait until you get your 1099 to see what it says. Always save your statements for seven year for IRS purposes (like this). Compare the 1099 to your actual payments and see if they match or not. Send a certified letter return receipt to the company requesting corrected statements for the year 2023. Keep a copy of the letter and the certified receipt. You may need copies of your bank deposits to back up the correct amount with the IRS.
I always scan my checks and deposit slips to have as backups.
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Thanks for the reply. What can I do to get the money that I’m owed? assuming the amount on the statement is the correct amount that I was supposed to receive. This is in Oklahoma, can I file a complaint with OCC?
Contact the operator by certified mail return receipt and ask if all the checks have been deposited. Occasionally, some get lost in the mail or are stolen.
OK, thanks. That’s not the situation though. They gave me a list of checks that they issued but they don’t add up to their statement…it’s a software issue but they can’t seem to get me the additional money or correct the statement 
Just wondering if the minerals are in Oklahoma & you reside elsewhere.
yes, minerals are in Oklahoma and I live in Texas
When I first began reconciling actual payments to year end 1099’s I figured out that withheld state and federal income taxes were deducted from my monthly gross amounts and paid to the governments on my behalf, perhaps refunded when I filed my personal tax returns. Don’t know if that helps.
Most likely that is the difference. Oklahoma law says the operator/purchaser must withhold 5% of the gross value of the revenue that is then turned over to the state. When you file your OK tax return you will probably get those funds back.
Thanks for the thoughts but that’s not the problem. It only happened on a few checks - and the company admitted there was a software problem. They just haven’t fixed it for 9 months and now either they owe me more money or they need to correct the amounts so I don’t get a 1099 that is wrong and I pay more tax than I should.
Tax withholding is not the problem. I know how to read the stubs/statements and 7/9 checks in 2023 were reported correctly. The company admitted there was a software problem that caused the problem but they seem either unwilling, or unable, to correct it.
I’ve always found it interesting that business people can say something like “The system’s down…” or “It’s a computer problem.” and they’re automatically are absolved of any screw-ups. Darn it, it’s the company’s problem and they should be responsible!!
Reconcile the 1099 with the your checks. The 1099 should set out the gross royalties (before deduction of costs, severance taxes, OK income tax) and then set out the deductions, including the OK income tax withheld. Then you can see whether the net reported to IRS matches what you actually received. If the 1099 is not correct, send an email requesting that a corrected 1099 be issued. If the company refuses and the amount is small, perhaps you can deduct the difference as an additional cost on schedule E. Be sure to ask your tax advisor about whether this is acceptable. If the amount is substantial, you can point out to the company that Internal Revenue Code Section 7434 provides for civil damages for fraudulent filing on information returns as described in Section 6724(d)(1)(A). This list includes statements reporting payments of royalties. Here are links that I found on internet - https://www.govinfo.gov/content/pkg/USCODE-1998-title26/pdf/USCODE-1998-title26-chap76-subchapB-sec7434.pdf and 26 USC 6724: Waiver; definitions and special rules
@Lee_Cooper I agree! It’s amazing to me that their “bookkeeper” has admitted to me, in both email and voicemail, that their system is erroneous but now won’t answer calls/email. I guess she’s hoping I forget.
@TennisDaze thanks for the ideas - those links are great! I use QuickBooks so it’s easy for me to run reports that I can use to show the proof of the errors.
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