I have recently learned about this depletion deduction. I looked at my past income taxes returns and my CPA has never deducted the 15% on the gross since I inherited it 10years ago. Does anyone know if there’s any way to recover this over payment of taxes every year from 2012! Thanks for any info! Trish
Maybe you need a more knowledgeable accountant. You can amend your returns to claim the deduction.
Probably. I emailed to tell them and was told they’d look into it but can only amend for 3 past years. So that mean for the last 10 years ( minus the 3 ) I will have lost those deductions. I don’t know any oil and gas CPAs in my area.
What State are your royalties located in? We have a CPA who knows the ins and out of the tax laws governing oil and gas interests. Our CPA is knowledgeable for OK, TX, NM, & CO.
Statute is later of filing due date or when you filed looking back 3 years.
How much depletion was missed over those 7 years and what was your marginal federal and state tax rate? If material, CPA is on the hook for that. His or her E&O insurance will pick up the cost plus interest.
Everyone makes mistakes. I made a ton. If I cost taxpayer tax that would not have otherwise been owed, I ponied up But not taking statutory depletion on oil and gas is negligent and imho should be reimbursed to you via cash or credited fees (which I wouldn’t recommend the latter cause u need a better cpa. This stuff ain’t rocket science).
Btw if you have caliche sales you get 5% statutory.
That’s what I think.
T (HAPPILY retired CPA of 34 years effective August 1, 2021).
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What if the tax preparer(not CPA, H&R Block) did the same thing for many years? Depletion allowance and didn’t request check statements and only used the 1099 that sated the gross.
Might be easier. I’d think H&R might have a negligence clause in your engagement letter. Give that a look first and regardless a) calculate tax cumulative impact and call H&R corporate legal compliance with your data in hand. Let me know how it turns out.
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