Key Filing Compliance Requirements

Secretary-Treasurer, Michael Coleman

This article is a reminder that it is that time of year to review our year-end financial records and execute our compliance requirements. We have seen a large number of retirements in our ranks and many younger members are getting involved in their local leadership. This new energy is encouraging and exciting and will require education and mentoring. Fiscal responsibility is vital; therefore, we will be scheduling training sessions for financial officers that will be conducted via video conference or in-person when possible. These will be scheduled throughout the year. Also, note that we’ll be updating and implementing a new Secretary/Treasurer Fiscal guide later this summer.

The UWUA maintains our commitment to assisting and reinforcing the importance of regulatory compliance and the protection of our Union’s funds and assets.

The UWUA continues to work with the DOL through the Voluntary Compliance Partnership Program to assist our affiliates’ compliance with the Office of Labor Management Standards (OLMS). We continue to review several of the Voluntary Compliance Program objectives, including the following: 1) Continued  partnership in the program; 2) Maintaining the mandatory  electronic filing requirements; 3) Bonding requirements; 4) Review of all affiliate’s compliance; and 5) Utilization of OLMS resources to assist the UWUA financial training efforts.

Listed below, are several key components for reference and proper filing. As always, please do not hesitate to contact the National Office for guidance, clarification, or assistance.

DOL Filing Requirements

What Form do you file?

Depending on size of the organization’s receipts, there are three potential forms your local union would be required to file:

  • Form LM-2 – required when your local union’s total annual receipts were $250K or more.
  • Form LM-3 – required when your local union’s total annual receipts were $10K or more, but less than $250K.
  • Form LM-4 – required when your local union’s total annual receipts were less than $10K.

When is the Form due to the DOL?

The Form LM-2, LM-3 and LM-4 are required to be filed within 90 days after an organization’s fiscal year-end and must be filed electronically. The DOL does not authorize or allow extensions.

Fidelity Bonding Requirements

The Labor-Management Reporting and Disclosure Act (LMRDA) provides that any person who handles union funds must be bonded for an amount of at least 10% of the funds handled (including assets and income) during the previous fiscal year up to a maximum of $500,000. The coverage must be computed at the start of each fiscal year and any increase in coverage must be adjusted promptly. The National Office does obtain the coverage for your local union or council through a national policy. In order to obtain the coverage, each affiliate must provide the National Office with the amount of coverage needed annually. Please contact the National Office for assistance in determining the amount of bonding required.

IRS Filing Requirements

What IRS Form do you file?

Depending on the size of your local union’s assets and receipts, there are three potential forms organizations would be required to file:

  • 990-N (Postcard) – if your union normally has gross receipts of $50K or less.
  • 990-EZ – if your union has gross receipts of less than $200K and total assets at the end of the tax year of less than $500K.
  • Form 990 (full form) – which is filed if either gross receipts are greater than or equal to $200K or total assets are greater than or equal to $500K at the end of the tax year.

When is the Form due to the IRS?

All forms are to be filed electronically and for organizations that have a calendar year end of December 31 the Form 990, 990-EZ, and 990-N is due May 15th (4 ½ months after year end). Organizations can apply for an extension which will extend the time to November 15th (10 ½ months after year end). Steep monetary penalties may apply for late filers.

Ramifications for Non-Compliance 

In addition to monetary penalties, if you do not file for three consecutive years, your local union’s tax exemption will be automatically revoked, and it will be considered a taxable entity and possibly be subject to income taxes similar to for-profit entities. Once this occurs, there is a fairly lengthy application process to get reinstated as a tax-exempt organization – so please make sure to comply with the annual filing requirements.