Check your 1099's
Just a heads up. I was preparing to file my taxes a few weeks ago and noticed I had a 2015 "1099-MISC" from Encana for $445.08. I have a couple of small leases and receive a small royalty check from one each month. I thought other 1099's I received accounted for all the royalty and lease amount.
So I did some accounting and found where Encana had sent me a check for $445.08 in June of 2014. This was to exercise a renewal clause on a lease for three years. The expiration date to renew that lease had lapsed so I sent the check back with a letter to renegotiate the lease terms. The lease was never renewed and I was ok with that. I figured if it wasn't under lease, maybe someone else would come along with a better offer.
I called Encana and spoke with a very friendly lady named Alba Marsden. I explained the above information to her and she sent the information up the ladder. Another not so friendly lady called me back and informed me they were working on it. After a few days and conversations, I was told the 1099-MISC had been sent in error and would be retracted.
My concerns are;
1) If this would have been missed, I would have paid taxes on top of not receiving the check. Encana would have reaped the benefit of calling this a loss. I realize we're only talking about $445 here, but if this is happening often, it can add up to big dollars. How in the world can a company accidentally 1099 me in 2015 for a check issued and refused in 2014?
2) If they had in their computer system that these mineral rights were under lease, then no other company would have approached me with a lease offer.
3) Here I sit at the end of March having not filed my taxes holding an inaccurate 1099 from Encana who has told me by word of mouth that they are retracting it. If I file and omit it and Encana doesn't retract it properly, does that constitute an audit?
-Has this cost me money by showing my minerals improperly leased...maybe.
-Will Encana send me a check and say "our mistake,we just want to make it right"-maybe.
-Is this even a "mistake"...who knows.
Anybody else have 1099 "mistakes" with Encana?
Views: 1278
Replies to This Discussion
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Permalink Reply by Skip Peel - Mineral Consultant on -
As to concern number two, there is no relevance regarding Encana's computer system and your mineral rights. What matters is what is filed in the public record. Parties with possible interest in leasing your minerals would research the public records filed in your parish or county. They don't have access to Encana's system and wouldn't rely on it if they did. Upon the expiration of the primary term of your original lease and Encana's refusal to discuss a new lease it was time to file a Release of Lease in the public record. Did you make a request in writing to Encana to file a release? Regarding number one, I don't think the instances of return checks for renewal options would be large in number. I don't have an opinion on number three as it is out of my area of expertise.
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Permalink Reply by dbob on
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Highly unlikely to cause an audit, in and of itself. Likely to cause IRS to either recalculate a refund or send you a bill for additional taxes.
If IRS actually audited everyone who forgot a 1099 or W2 when filing, there would not be anyone left to go after legitimate tax cheats.
Now if you argued with IRS about the return without having the corrected 1099 in hand, that's somewhat likely to cause an audit.
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Permalink Reply by full name on
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Had the same problem with Brooks Oil for years. They finally shut down. Every year my 1099 would not match my income (income on 1099 was always overstated). I could never get a reply from Brooks Oil. Each year I just included a statement on my tax return stating (1) that the 1099 was wrong, (2) Brooks would not correct it, and (3) here was a list of the checks I received and when I received them.
One year I requested the IRS to investigate Brooks for hidden income (hoping I would get a reward) but they never did. When Brooks died they found a bunch of unsigned royalty checks in his desk.
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Permalink Reply by full name on
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Never heard back from the IRS. I did this based on recommendation from my CPA. I think the key is to provide documentation with your return.
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Permalink Reply by John Hott on
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Isn't that the truth. They have to go after people who failed to buy 0bamacare so that they can collect the penalties. Or is that taxes? Or penalties? It's hard to remember what the Chief Justice said, let alone how he arrived at his conclusion.
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Permalink Reply by Bob Zimmerman on
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For what it's worth, a 1099 is not by itself proof of payment.
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