Oil/Gas/w-9

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Question
Hi,
I have a request to fill out & return a W-9 for an old (1989/previous owner)oil & gas lease. Should I do so? Will doing so renew the lease or something...?
Jeff

Answer
An IRS Form W-9 will not renew, extend, or modify any existing, valid lease in any way.  A W-9 form is printed by the IRS and used by payers only for the purpose of verifying the tax identification number to be used for reporting to the IRS income paid to a taxpayer.  In the case of an individual person, the tax ID number is their Social Security Number.  For all others, the tax ID will be the Employer Identification Number (EIN) issued by the IRS to a legally-formed entity (trust, corporation, partnership, etc.).

It sounds like the company asking you to fill out and sign a W-9 form has some money they are holding and they won't pay it to you until they can report it properly to the IRS.  That means being able to issue a 1099 income-reporting statement next January issued to you stating your Social Security Number or EIN on it.  Only that way can they safely take your royalty payments as a business write-off.

Only a legal document containing a granting clause (the signer "hereby grants, sells, conveys, lets and leases, and by these presents does hereby grant, sell, convey, let and lease" must be words in a granting clause), that must be notarized by a notary, can ever renew, extend, or modify any existing, valid lease.  The W-9 form doesn't have this language in it, and doesn't contain anywhere in it for a notary public to sign it (called an "acknowledgement").

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Marsha Breazeale, M.Ed., CDOA, CPLTA

Expertise

All questions regarding division orders; ownership decimal calculations; title ownership and payer record changes (testate/intestate inheritance; deed; assignment; court order); oil and gas lease analysis for record-keeping and purposes of payment by operator or payer; pooling, horizontal wells, horizontal well allocation units; unclaimed property reporting; royalty owner relations questions. All questions concerning administration of surface land contracts and payment questions, such as for Surface Right-of-Way, Sub-Surface Right-of-Way, Easement, Surface Use Agreement. All questions regarding industry-standard and company-specific policies that affect land owners.

Experience

Sr. Staff Division Order Analyst. Certified Division Order Analyst (CDOA, National Association of Division Order Analysts) and Certified Lease Analyst (CPLTA, National Association of Professional Lease and Title Analysts) with 35 years of experience as a combination division order analyst and lease analyst in exploration and production in the oil and gas industry.

Organizations
National Assoc. of Division Order Analysts (NADOA), National Association of Division Order Analysts (NALTA), American Association of Professional Landmen (AAPL), American Society of Trainers and Developers (ASTD)

Publications
"How an Oil & Gas Exploration & Production Company Operates" and "Principles of Oil & Gas Lease Analysis: Standard Clauses", Oil Patch Press; Articles in NADOA Magazine; LandFocus EDU Professional Training Manuals

Education/Credentials
B.A.in Management from Our Lady of the Lake University in San Antonio; M.Ed. in Instructional Design from WGU Texas.

Past/Present Clients
Past 15 years: GeoSouthern Energy Corporation; Contango Oil Co./Crimson Exploration & Operating Inc.; Apache Corporation; BP America; Marathon Oil; Newfield Exploration

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