dismissed EB-2 Case: Mechanical Engineering

iidentifying data deleted to 
prevent clearly unwarranted 
invasion of personal privacy 
PUBLlCCOPY 
GEORGIA HYDRAULIC CYLINDERS. INC 
ATTN.: DENA HUBER 
260 THE BLUFFS 
AUSTELL. GA 30168 
DATEAUG 222012 Office: TEXAS SERVICE CENTER 
IN RE: Petitioner: 
Beneficiary: 
U.S. UCl1artmcnt Ill' lIomeland S(,Cllrit~ 
u.s. Clti/(?nship and [1llI1l1grallun Services 
Ad1Tlilli~{rali\'c I\ppcaJ:.; Office LA.AO) 
20 M(lssachusl'HS AH'. :-.l.W .. MS 2090 
Wa~hing\ol1, DC 2().'i19 20l)() 
u.s. Citizenship 
and Immigration 
Services 
PETITION: Immigrant Petition for Alien Worker as a Member of the Professions Holding an Advanced 
Degree Or an Alien of Exceptional Ability Pursuant to Section 203(b)(2) of the 
Immigration and Nationality Act, 8 U.s.C § 11 53(b)(2) 
ON BEHALF OF PETITIONER: 
INSTRUCTIONS: 
Enclosed please find the decision of the Administrative Appeals Office in your case. All of the 
documents related to this matter have been returned to the office that originally decided your case. Please 
hL' advised that any fUl1her inquiry that you might have concerning your case must be made to that office. 
If you believe the AAO inappropriately applied the law in reaching its decision, or you have addition,Ii 
information that you wish to have considered, you may file a motion to reconsider or a motion to reopen 
in accordance with the instructions on Form I-290B, Notice of Appeal or Motion, with a fcc of $630. The 
specific requirements for filing such a motion can be found at 8 C.F.R. § 103.5. Do not file any motion 
directly with the AAO. Please be aware that 8 CF.R. § I 03.5(a)( I )(i) requires any motion to be filed 
within 30 days of the decision that the motion seeks to reconsider or reopen. 
Chief. Administrative Appeals Office 
wwvt',uscis.goy 
Page 2 
DISCUSSION: The preference visa petition was denied by the Director, Texas Service Center, 
and is now before the Administrative Appeals Office (AAO) on appeal. The appeal will be 
dismissed. 
The petitioner is a manufacturer of hydraulic cylinders. It seeks to employ the beneficiary 
permanently in the United States as a manager in its engineering department. As required by 
statute, the petition is accompanied by an ETA Form 9089, Application for Permanent 
Employment Certification, approved by the United States Department of Labor (DOL). The 
director determined that the petitioner had not established that it had the continuing ability to pay 
the beneficiary the proffered wage beginning on the priority date of the visa petition. The 
director denied the petition accordingly. 
The record shows that the appeal is properly filed, timely and makes a specific allegation of error 
in law or fact. The procedural history in this case is documented by the record and incorporated 
into the decision. Further elaboration of the procedural history will be made only as necessary. 
As set forth in the director's January 24, 2011 denial, the issue in this case is whether the 
petitioner has the ability to pay the proffered wage as of the priority date and continuing until the 
beneficiary obtains lawful permanent residence. 
In pertinent part, section 203(b)(2) of the Immigration and Nationality Act (the Act), 8 u.s.c. * 
1153(b )(2), provides immigrant classification to members of the professions holding advanced 
degrees or their equivalent and whose services are sought by an employer in the United States. 
An advanced degree is a United States academic or professional degree or a foreign equivalent 
degree above the baccalaureate level. 8 C.F.R. § 204,5(k)(2). The regulation further states: "A 
United States baccalaureate degree or a foreign equivalent degree followed by at \east five years 
of progressive experience in the specialty shall be considered the equivalent of a master's 
degree. If a doctoral degree is customarily required by the specialty, the alien must have a 
United States doctorate or a foreign equivalent degree." [d. 
Section 203(b)(2) of the Act also includes aliens "who because of their exceptional ability in the 
sciences, arts or business, will substantially benefit prospectively the national economy. cultural 
or educational interests. or welfare of the United States." The regulation at X C.F.R. * 
204.5(k)(2) defines "exceptional ability" as "a degree of expertise significantly above that 
ordinarily encountered." 
The regulation at 8 C.F.R. § 204.5(g)(2) states in pertinent part: 
Ability (If' prospective employer to pay wage. Any petition filed by or for an 
employment-based immigrant which requires an offer of employment must be 
accompanied by evidence that the prospective United States employer has the 
ability to pay the proffered wage. The petitioner must demonstrate this ability at 
the time the priority date is established and continuing until the beneficiary 
obtains lawful permanent residence. Evidence of this ability shall be either in the 
Page 3 
form of copIes of annual reports, federal tax returns, or audited financial 
statements. 
The petitioner must delllonstrate the continuing ability to pay the proffered wage beginning on 
the priority date, which is the date the ETA Form 9089 was accepted for processing by any office 
within the employment system of the DOL. See 8 C.F.R. § 204.5(d). The petitioner must also 
demonstrate that, on the priority date, the beneficiary had the qualifications stated on its ETA Form 
9089 as certified by the DOL and submitted with the instant petition. Matter o( Wing's Tcu Hot/ole, 
16 I&N Dec. 158 (Act. Reg. Comm. 1977). 
Here, the ETA Form 9089 was accepted on December 11, 2008. The proffered wage as stated on 
the ETA Form 9089 is $72,970.00 per year. The ETA Form 9089 states that the position 
requires a master's degree in mechanical engineering and 12 months experience in a related 
occupation, working with hydraulic systems and cylinders. 
The AAO conducts appellate review on a de novo basis. See So/tane I'. DO}, 38 I F.3d 143, 145 
(3d Cir. 2(04). The AAO considers all pertinent evidence in the record, including new evidence 
properly submitted upon appeaL I 
The evidence in the reeord of proceeding shows that the petitioner was structured as an S 
corporation from January I, 2008 to January 28, 2008 and is structured as a C corporation from 
January 29, 2008 onward. On the petitioner's Form 1-140, the petitioner claimed to have been 
established on March 19, 1976 and that it currently employs 48 workers. According to the tax 
retums in the record, the petitioner's fiscal year is based on a calendar year. On the ETA Form 
9089, signed by the beneficiary, the beneficiary claims to have been employed by the petitioner 
from May 30, 2006 to December 11, 2008. 
The petitioner must establish that its job offer to the beneficiary is a realistic one. Because the filing 
of an ETA Form 9089 labor certitication application establishes a priority date for any immigrant 
petition later based on the ETA Form 9089, the petitioner must establish that the job offer was 
realistic as of the priority date and that the offer remained realistic for each year thereafter, until the 
beneficiary obtains lawful pemlanent residence. The petitioner's ability to pay the proffered wage 
is an essential element in evaluating whether a job offer is realistic. See Matter of' Great Wall, 16 
I&N Dec. 142 (Acting Reg. Comm. 1977); see also 8 C.F.R. § 204.5(g)(2). In evaluating whether 
a job offer is realistic, United States Citizenship and Immigration Services (USCIS) requires the 
petitioner to demonstrate financial resources sufficient to pay the beneficiary's proffered wages, 
although the totality of the circumstances affecting the petitioning business will be considered if the 
evidence warrants such consideration. See Matter of'Sonegawa, 12 I&N Dec. 6 I 2 (Reg. Comm. 
1967). 
In determining the petitioner's ability to pay the proffered wage during a given period, USClS 
will first examine whether the petitioner employed and paid the beneficiary during that period. If 
I The submission of additional evidence on appeal is allowed by the instructions to the Form 1-
2908, which are incorporated into the regulations at 8 C.F.R. § 103.2(a)( I). 
Page 4 
the petitioner establishes hy documentary evidence that it employed the heneficiary at a salary 
equal to or greater than the proffered wage, the evidence will be considered primo f(lcie proof of 
the petitioner's ability to pay the proffered wage. 
The petitioner is obligated to show that it can pay the proffered wage in each relevant year. The 
petitioner suhmitted a copy of the beneficiary's IRS Form 1040 for 2008 which indicates wages 
paid in the amount of S6 1.54 1.00. However, there is nothing in the record to demonstrate that 
the wages the beneficiary received for 2008 were from the petitioner. Going on record without 
supporting documentary evidence is not sufficient for purposes of meeting the burden of proof in 
these proceedings. Moller or Sofjlci, 22 I&N Dec. 158, 165 (Comm'r 1998) (citing Maller or 
Treasure Crafi or Calif(JrlJia, 14 I&N Dec. 190 (Reg'l Comm'r 1972)). 
The record of proceeding contains a copy of IRS Forms W-2 as shown in the table below: 
• In 2009, the Form W-2 stated total wages of $30,081.7 I (a deficiency of 
$42,888.29). 
• In 20 I O. the Form W -2 stated total wages of $74,2 I 9.7 I. 
If, as in this case, the petitioner does not establish that it employed and paid the beneficiary an 
amount at least equal to the proffered wage throughout the designated period, then USCIS will 
next examine the net income figure reflected on the petitioner's federal income tax return, 
without consideration of depreciation or other expenses. River Street Donuts. LLC v. 
Napolitano. 558 F.3d III (1" Cir. 2009): Taco Especial v. Napolitano, 696 F. Supp. 2d 873 
(E.D. Mich. 2010), ~fj"d, No. 10-1517 (6th Cir. filed Nov. 10,2011). Reliance on federal income 
tax returns as a basis for determining a petitioner's ability to pay the proffered wage is well 
established by judicial precedent. Elatos Restaurant Corp. v. Sava, 632 F. Supp. 1049, 1054 
(S.D.N.Y. 1986) (citing Tongatapu Woodcr~rt Hawaii, Ltd. v. Feldmall, 736 F.2d 1305 (9th Cir. 
1984»; see also Chi-Feng Chang v. Thornburgh, 719 F. Supp. 532 (N.D. Texas 1989): K.c.P. 
Food Co .. fne. v. So\'({, 623 F. Supp. 1080 (S.D.N.Y. 1985); Ubeda v. Pet/mer, 539 F. Supp. 647 
(N.D. III. 1982), afj"d, 703 F.2d 571 (7th Cir. 1983). Reliance on the petitioner's gross receipts 
and wage expense is misplaced. Showing that the petitioner's gross receipts exceeded the 
proffered wage is insufficient. Similarly showing that the petitioner paid wages in excess of the 
proffered wage is insufficient. 
In K.c.P. Food Co., fnc, v. Sava, 623 F. Supp. at 1084, the court held that the Immigration and 
Naturalization Service, now USCIS, had properly relied on the petitioner's net income figure, as 
stated on the petitioner's corporate income tax returns, rather than the petitioner's gross income. 
The court specifically rejected the argument that USCIS should have considered income before 
expenses were paid rather than net income. See Taco Especial v. Napolitano, 696 F. Supp. 2d at 
881 (gross profits overstate an employer's ability to pay because it ignores other necessary 
expenses). 
With respect to depreciation, the court in River Street Donuts noted: 
The AAO recognized that a depreciation deduction is a systematic allocation 
Page 5 
of the cost of a tangible long-term asset and does not represent a specific cash 
expenditure during the year claimed. Furthermore, the AAO indicated that the 
allocation of the depreciation of a long-term asset could be spread out over the 
years or concentrated into a few depending on the petitioner's choice of 
accounting and depreciation methods. Nonetheless, the AAO explained that 
depreciation represents an actual cost of doing business, which could 
represent either the diminution in value of buildings and equipment or the 
accumulation of funds necessary to replace perishable equipment and 
buildings. Accordingly, the AAO stressed that even though amounts deducted 
for depreciation do not represent current use of cash, neither does it represent 
amounts available to pay wages. 
We find that the AAO has a rational explanation for its policy of not adding 
depreciation back to net income. Namely, that the amount spent on a long 
term tangible asset is a "real" expense. 
River Street [Jonuts at 118. "IUSCISJ and judicial precedent support the use of tax returns and 
the net incol1lc/igures in determining petitioner's ability to pay. Plaintiffs' argument that these 
figures should be revised by the court by adding back depreciation is without support." Chi­
Feng Chang at 537 (emphasis added). 
For a C corporation, USCIS considers net income to be the figure shown on Line 28 of the Form 
1120, U.S. Corporation Income Tax Return. The petitioner's 2008 tax return arc the most recent 
records before the director. 
The proffered wage is $72,970.00. The petitioner's tax returns demonstrate its net income as 
shown in the table below. 
• In 2008 (January 29, 2008 through December 31,2008), the Form 1120 stated 
net income of -$1,547,999.00. 
The petitioner's 11205 2 tax return demonstrates its net income as sbown in the table below: 
• In 2008 (January 1,2008 through January 28, 2008), the Form 1120S stated 
net income of -$261,719.00. 
2 Where an S corporation's income is exclusively from a trade or business, uscrs considers net 
income to be the figure for ordinary income, shown on line 21 of page one of the petitioner's IRS 
Form 1120S. However, where an S corporation has income, credits, deductions or other 
adjustments from sources other than a trade or business, they are reported on Schedule K. If the 
Schedule K has relevant entries for additional income, credits, deductions or other adjustments, net 
income is found on line 18 of Schedule K. See Instructions for Form 1120S, at 
http://www.irs.gov/publirs-pdfIiI120s.pdf (indicating that Schedule K is a summary schedule of 
all shareholders' shares of the corporation's income, deductions, credits, etc.). 
Page 6 
Therefore, for the fiscal year 2008, the petitioner failed to establish its ability to pay the proffered 
wage to the beneficiary through its net income] 
As an alternate means of determining the petitioner's ability to pay the proffered wage, USC[S 
may review the petitioner's net current assets. Net current assets, with respect to Form 1120 and 
Form 11205, are the difference between the petitioner's current assets and current liabilities." A 
corporation's year-end current assets are shown on Schedule L, lines I through 6. Its year-end 
current liabilities are shown on lines 16 through 18. If the total of a corporation's end-or-year 
net current assets and the wages paid to the beneficiary (if any) are equal to or greater than the 
proffered wage, the petitioner is expected to be able to pay the proffered wage using those net 
current assets. The petitioner's tax retnrns demonstrate its end-of-year net CUITcnt assets as 
shown in the table below: 
• In 2008 (January 29,2008 through December 31,2008), the Form 1120 stated 
net current assets of -$3,657,087.00. 
The petitioner's 11205 tax returns demonstrate its net current assets as shown in the table below: 
• [n 2008 (January 1,2008 through January 28, 2008), the Form 1120S stated 
net current assets of -$988,586.00. 
The evidence demonstrates that for the year 2008, the petitioner did not have sufficient net 
current assets to pay the proffered wage. 
Therefore, from the date the ETA Form 9089 was accepted for processing by the DOL, the 
petitioner had not established that it had the continuing ability to pay the beneficiary the 
proffered wage as of the priority date through an examination of wages paid to the beneficiary, 
or its net income or net current assets. 
On appeal, the petitioner asserts that the director failed to consider all of the facts and evidence 
in the case in order to obtain an accurate account of the petitioner's financial ability to pay the 
proffered wage. 
The petitioner's representative who identifies himself as "Chief Executive Officer and Chief 
Financial Officer" stated that the petitioner employs more than 100 people and that the petitioner 
has the ability to pay the proffered wage. The representative also stated that the beneficiary'S 
Form W-2 for 2009 shows that he made less than the proffered wage because he didn't work the 
full year. Contrary to the representative's claims, the petitioner stated on the Form 1-140 petition 
J The petitioner did not provide tax returns for 2009. 
4Accor ding to Barron's Dictionary o{ Accounting Terms 117 (3,d ed. 20(0), "current assets" 
consist of items having (in most cases) a life of one year or less, such as cash. marketable 
securities, inventory and prepaid expenses. "Current liabilities" are obligations payable (in most 
cases) within one year, such accounts payable, short-term notes payable, and accrued expenses 
(such as taxes and salaries). [d. at 118. 
Page 7 
at Part 5, number 2 that the company employed 48 workers. There has been no explanation 
given for this inconsistency. Doubt cast on any aspect of the petitioner's proof may, of course, 
lead to a reevaluation of the reliability and sufficiency of the remaining evidence offered in 
support of the visa petition. It is incumbent on the petitioner to resolve any inconsistencies in the' 
record by independent objective evidence, and attempts to explain or reconcile such 
inconsistencies, absent competent objective evidence pointing to where the truth. in fact, lies, 
will not suffice. See Motter o( Ho, 19 I&N Dec. 582, 591-592 (BIA 1988). Furthermore. the 
regulation states in part: 
The petitioner must demonstrate this ability at the time the priority date is 
established and continuing until the beneficiary obtains lawful permanent 
residence. Evidence of this ability shall be either in the form of copies of annual 
reports, federal tax returns, or audited financial statements. In a case where the 
prospective United States employer employs 100 or more workers, the director 
may accept a statement from a financial officer of the organization which 
establishes the prospective employer's ability to pay the proffered wage. 
8 C.F.R. § 204.5(g)(2). In this matter there is no evidence to substantiate the claim that the 
petitioner employed 100 workers or more. The petitioner has not provided any evidence that it 
would have otherwise been able to pay the proffered wage for 2009 through its net income or net 
current assets. 
The petitioner submitted a copy of unaudited financial statements for 2009 and 2010. However. the 
petitioner's reliance on unaudited financial records is misplaced. The regulation at 8 C.F.R. 
§ 204.5(g)(2) makes clear that where a petitioner relies on financial statements to demonstrate its 
ability to pay the proffered wage, those financial statements must be audited. As there is no 
accountant's report accompanying these statements, the AAO cannot conclude that they are 
audited statements. Unaudited financial statements are the representations of management. The 
unsupported representations of management are not reliable evidence and are insufficient to 
demonstrate the ability to pay the proffered wage. Regardless, the 2009 unaudited financial 
statements show the petitioner having negative net income and negative net current assets in that 
year. Accordingly, these would not establish the petitioner's ability to pay the wage in 2009 
even if they were persuasive evidence. 
The evidence presented on appeal cannot be concluded to outweigh the evidence of record that 
demonstrates that the petitioner could not pay the proffered wage from the day the ETA Form 
9089 was accepted for processing by the DOL. 
USCIS may consider the overall magnitude of the petitioner's business activities in its 
determination of the petitioner's ability to pay the proffered wage. See Maller o( SOllegawa. 
12 I&N Dec. 612. The petitioning entity in Sonegawa had been in business for over II years and 
routinely eamed a gross annual income of about $100,000. During the year in which the petition 
was filed in that case, the petitioner changed business locations and paid rent on both the old and 
new locations for five months. There were large moving costs and also a period of time when 
the petitioner was unable to do regular business. The Regional Commissioner determined that 
Page 8 
the petitioner's prospects for a resumption of successful business operations were well 
established. The petitioner was a fashion designer whose work had been featured in Time and 
Look magazines. Her clients included Miss Universe, movie actresses, and society matrons. The 
petitioner's clients had been included in the lists of the best-dressed California women. The 
petitioner lectured on fashion design at design and fashion shows throughout the United States 
and at colleges and universities in California. The Regional Commissioner's determination in 
Sonegawa was based in part on the petitioner's sound business reputation and outstanding 
reputation as a couturiere. As in Sonegawa, USCIS may, at its discretion, consider evidence 
relevant to the petitioner's financial ability that falls outside of a petitioner's net incomc and net 
current assets. USCIS may consider such factors as the number of years the petitioner has heen 
doing husiness, the established historical growth of the petitioner's business, the overall number 
of employees, the OCCUITcnce of any uncharacteristic business expenditures or losses, the 
petitioner's reputation within its industry, whether the beneficiary is replacing a former 
employee or an outsourced service, or any other evidence that USCIS deems relevant to the 
petitioner's ability to pay the proffered wage. 
In this matter, the totality of the circumstances does not establish that the petitioner had the 
ability to pay thc proffered wage in 2008 and 2009. There are no facts paralleling those found in 
SO/legowo that are present in the instant matter to a degree sufficient to estahlish that the 
petitioncr had the ability to pay the proffered wage. The petitioner has not demonstrated the 
OCCUITence of any uncharacteristic business expenditures or losses in the relevant years. 
Overall. the record is not persuasive in establishing that the job offer was realistic. 
Accordingly, the evidence submitted does not establish that the petitioner had the continuing 
ability to pay the proffered wage beginning on the priority date. 
The burden of proof in these proceedings rests solely with the petitioner. Section 291 of the Act, 
S U.S.c. ~ 1361. The petitioner has not met that burden. 
ORDER: The appeal is dismissed.