Lease contract with tax form?

I just signed an oil and gas lease in Midland, TX and given a bonus check. Many people in my area have already signed a lease,The landman was very polite and explained things well, or at least to me it seemed he did. He works for Slickrock Land Services, LLC and is representing Mockingbird Resources LLC He advised me not to sell but to lease. He wanted me to fill out a W-9 form which is a ‘Request for Taxpayer Identification Number and Certification’. I told him that I did not want to give my Social Security number, because of all the fraud nowadays, and didn’t but I did sign it. I later wondered if I should have even done that. He said that I could delay filling out the W-9 form so that I could look into it myself to see if it was ok and he will contact me if his company says they need my SS number. From what I understand, I am to pay taxes on money I receive as royalties or a bonus check. My question is do I have to fill out a W-9 form with my SS number and give it to that company, if not did I make a mistake by signing the form and leaving the rest blank? Thank you. Chris B.

The request you got to fill out the W-9, including your social security number and stating whether you are subject to back up withholding for tax purposes, is normal for a company that is paying you a lease bonus. At the end of the year they will be required to report that payment to the IRS. They will send you a copy of the 1099 form they use to report it. If they don’t report the payment of that bonus they will be subject to a fine by the IRS, the same as you will if you fail to report receiving that bonus payment when you file your tax return.

The lessee needs to have your social security number in order to file a 1099 with the IRS and send you a copy so that the income is reported on your tax return. It is not any different than with your bank requiring your social security number to report the interest on your bank account.

Thank you all very much for your help. My mind is at ease now.