Unions
Audits, DOL LM report support, Form 990, and benefit fund coordination for local unions, councils, and other labor organizations.
Overview
Labor organizations are generally exempt under IRC Section 501(c)(5), and they answer to two audiences at once: their members and the federal government. Under the Labor-Management Reporting and Disclosure Act, most unions file an annual financial report with the U.S. Department of Labor on Form LM-2, LM-3, or LM-4, depending on their annual receipts. They also file Form 990 with the IRS. Members expect transparency over dues and spending, and boards of trustees often require periodic audits.
Pease Bell works with local unions, district councils, and other labor organizations on financial statement audits, DOL LM report support, and Form 990 preparation. Because many unions sponsor or are closely tied to multiemployer pension, health and welfare, or training funds, we also help coordinate reporting between the union and its affiliated benefit funds. Our goal is consistent, well-documented financial information that trustees and members can rely on.
How We Help Unions
Union Audits
Financial statement audits for labor organizations, with focus on dues and per capita receipts, disbursements, officer and employee payments, and controls over cash and investments.
LM Report Support
Help preparing and reviewing Department of Labor LM-2, LM-3, or LM-4 annual reports, including the itemized schedules and categories the form requires at a general level.
Form 990 Preparation
Preparation and review of Form 990 for 501(c)(5) labor organizations, coordinated with the LM report so both public filings tell a consistent financial story to members and regulators.
Benefit Fund Coordination
Coordination with affiliated pension, health and welfare, and training funds on shared costs, reimbursements, and reporting, alongside employee benefit plan audits of those funds where needed.
Internal Control Reviews
Review of controls over dues collection, credit cards, payroll, and disbursements, with practical recommendations for officers and trustees who are responsible for safeguarding union finances.
Trustee Reporting
Clear financial reporting for executive boards and trustees, including budget comparisons and explanations of significant changes and trends that support board meetings and member communications.
Challenges We Help Unions Address
- ✓Completing LM reports accurately with the detail the DOL requires
- ✓Keeping LM reports, Form 990, and audited financials consistent
- ✓Allocating shared costs between the union and affiliated benefit funds
- ✓Maintaining strong controls over dues and disbursements
- ✓Officer transitions that disrupt financial recordkeeping
Frequently Asked Questions
What is the difference between Form LM-2, LM-3, and LM-4?
They are the annual financial reports labor organizations file with the Department of Labor’s Office of Labor-Management Standards. Which form a union files depends on its total annual receipts: the largest organizations file the detailed LM-2, mid-sized organizations may file the LM-3, and the smallest may file the simplified LM-4. Certain unions in trusteeship must file the LM-2.
Do labor unions file Form 990?
Generally yes. Labor organizations exempt under IRC Section 501(c)(5) file an annual Form 990 information return, or a shorter version if they meet the size thresholds. The IRS return is separate from the Department of Labor LM report, so the two filings should be reconciled to each other and to the union’s books.
Is a union required to have an audit?
Federal law does not generally require a union to have an independent audit, but union constitutions, bylaws, and international unions frequently do. Trustees may also request audits to strengthen oversight. Pease Bell performs financial statement audits for labor organizations and can help you understand which requirements apply.
How do unions coordinate with affiliated benefit funds?
Unions often share offices, staff, or systems with multiemployer pension, health and welfare, or training funds. Shared costs must be allocated and reimbursed under written agreements, and each entity keeps separate books and filings. We help unions and funds document these arrangements and keep their reporting consistent.
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