dismissed EB-3 Case: Alteration Tailor

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mLIC COPY 
U.S. Department of Homeland Security 
20 Mass. Ave., N.W., Rm. A3042 
Washington, DC 20529 
U. S. Citizenship 
and Immigration 
S6 
FILE: EAC-04-030-50239 Office: VERMONT SERVICE CENTER Date: )UY 1 8 ~~ 
IN RE: Petitioner: 
Beneficiary: 
PETITION: 
 Petition for Alien Worker as a Skilled Worker or Professional Pursuant to Section 203(b)(3) 
of the Immigration and Nationality Act, 8 U.S.C. $ 1153(b)(3) 
ON BEHALF OF PETITIONER: 
INSTRUCTIONS: 
This is the decision of the Administrative Appeals Office in your case. All documents have been returned to 
the office that originally decided your case. Any further inquiry must be made to that office. 
Administrative Appeals Office 
EAC-04-030-50239 
Page 2 
DISCUSSION: The preference visa petition was denied by the Director, Vermont Service Center, and is 
now before the Administrative Appeals Office (AAO) on appeal. The appeal will be dismissed 
The petitioner is a dry cleaning plant and alternation company firm. It seeks to employ the beneficiary 
permanently in the United States as an alteration tailor. As required by statute, a Form ETA 750, Application 
for Alien Employment Certification approved by the Department of Labor, accompanied the petition. 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 and denied the petition 
accordingly. 
Section 203(b)(3)(A)(i) of the Immigration and Nationality Act (the Act), 8 U.S.C. $ 1153(b)(3)(A)(i), 
provides for the granting of preference classification to qualified immigrants who are capable, at the time of 
petitioning for classification under this paragraph, of performing skilled labor (requiring at least two years 
training or experience), not of a temporary or seasonal nature, for which qualified workers are not available in 
the United States. 
The regulation at 8 C.F.R. 9 204.5(g)(2) states: 
Ability ofprospective 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 
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. In appropriate cases, additional 
evidence, such as profitfloss statements, bank account records, or personnel records, may be 
submitted by the petitioner or requested by [Citizenship and Immigration Services (CIS)]. 
The petitioner must demonstrate the continuing ability to pay the proffered wage beginning on the petition's 
priority date, which is the date the Form ETA 750 was accepted for processing by any office within the 
employment system of the Department of Labor. See 8 C.F.R. 9 204.5(d). The priority date in the instant 
petition is April 27, 2001. The proffered wage as stated on the Form ETA 750 is $10.35 per hour, which 
amounts to $21,528.00 annually. The ETA 750 was certified by the Department of Labor on April 11,2003 
The instant petition is for a substituted beneficiary. An 1-140 petition for a substituted beneficiary retains the 
same priority date as the original ETA 750. Memo. from Luis G. Crocetti, Associate Commissioner, 
Immigration and Naturalization Service, to Regional Directors, et al., Substitution of Labor Certzjication 
Beneficiaries, at 3, http://ows.doleta.gov/dmstree/fm~fm96/fm28-96a.pdf (March 7, 1996). 
The 1-140 petition was submitted on November 12, 2003. On the petition, the petitioner claimed to have been 
established in 1999, to currently have two employees, to have a gross annual income of $242,598.00, and to 
have a net annual income of $10,000.00. With the petition, the petitioner submitted a Form ETA 750B with 
information pertaining to the qualifications of the new beneficiary. On the Form ETA 750B, signed by the 
beneficiary on October 9, 2003, the beneficiary did not claim to have worked for the petitioner. With the 
petition, the petitioner submitted supporting evidence. 
The director did not issue a request for additional evidence. 
EAC-04-030-50239 
Page 3 
In a decision dated September 3, 2004, the director determined that the evidence did not establish that the 
petitioner had the ability to pay the proffered wage as of the priority date and continuing until the beneficiary 
obtains lawful permanent residence, and denied the petition. 
On appeal, counsel submits a brief and no additional evidence. Counsel also submits an additional copy of a 
tax return of the petitioner which had been submitted prior to the director's decision. Counsel states on 
appeal that the petitioner's tax return in the record shows substantial gross receipts. Counsel also states that 
depreciation expenses should be considered as additional financial resources of the petitioner. Finally, 
counsel states that funds spent on alteration work outsourced to an independent alteration tailor could have 
been saved if the beneficiary had been on the petitioner's payroll. 
The petitioner must establish that its job offer to the beneficiary is a realistic one. Because the filing of an 
ETA 750 labor certification application establishes a priority date for any immigrant petition later based on 
the ETA 750, 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 permanent 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. 
9 204.5(g)(2). 
 In evaluating whether a job offer is realistic, CIS 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. 612 (Reg. Comm. 1967). 
In determining the petitioner's ability to pay the proffered wage, CIS will first examine whether the petitioner 
employed the beneficiary at the time the priority date was established. If the petitioner establishes by 
documentary evidence that it employed the beneficiary at a salary equal to or greater than the proffered wage, 
this evidence will be considered prima facie proof of the petitioner's ability to pay the proffered wage. In the 
instant case, on the Form ETA 750B, signed by the beneficiary on October 9, 2003, the beneficiary did not 
claim to have worked for the petitioner, and no other evidence in the record indicates that the beneficiary has 
worked for the petitioner. 
As another means of determining the petitioner's ability to pay the proffered wage, CIS will next examine the 
petitioner's net income figure as reflected on the petitioner's federal income tax return for a given year, 
without consideration of depreciation or other expenses. 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 Woodcraft Hawaii, Ltd. v. 
Feldman, 736 F.2d 1305 (9~ Cir. 1984)); see also Chi-Feng Chang v. Thornburgh, 7 19 F. Supp. 532 (N.D. Tex. 
1989); K. C.P. Food Co., Inc. v. Sava, 623 F. Supp. 1080 (S.D.N.Y. 1985); Ubeda v. Palmer, 539 F. Supp. 647 
(N.D. Ill. 1982), aff'd., 703 F.2d 571 (7~ Cir. 1983). In K. C.P. Food Co., Inc., the court held that the Immigration 
and Naturalization Service, now CIS, 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. 623 F. Supp. at 1084. The 
court specifically rejected the argument that the Service should have considered income before expenses were 
paid rather than net income. Finally, there is no precedent that would allow the petitioner to "add back to net cash 
the depreciation expense charged for the year." See Elatos Restaurant Corp., 632 F. Supp. at 1054. 
The evidence indicates that the petitioner is an S corporation. The record contains copies of the petitioner's Form 
1120s U.S. Income Tax Return for an S Corporation for 2001. Since no request for additional evidence was 
issued by the director, the record before the director closed on November 12, 2003 with the receipt by the director 
of the 1-140 petition and supporting documents. As of that date, the petitioner's federal tax return for 2002 should 
have been available. However, a copy of that return was not submitted prior to the director's decision, nor has a 
copy of that return been submitted on appeal. 
EAC-04-030-50239 
Page 4 
Where an S corporation's income is exclusively from a trade or business, CIS considers net income to be the 
figure for ordinary income, shown on line 21 of page one of the petitioner's Form 1120s. Where an S 
corporation has income from sources other than from a trade or business, that income is reported on Schedule K. 
See Internal Revenue Service, Instructions for Form 1120s (2003), available at http://www.irs.gov/pub/irs- 
prior/il120s--2003 .pdf; Instructions for Form 1 120s (2002), available at http://www.irs.gov/pub/irs-pnor/il120s- 
-2002.pdf. 
 Similarly, some deductions appear only on the Schedule K. 
 See Internal Revenue Service, 
Instructions for Form 4562 (2003), at I, available at http://www.irs.gov/pub/irs-prior/i4562--2003.pdf; Internal 
Revenue Service, Instructions for Form 1120s (2003), at 22, available at http://www.irs.gov/pub/irs-prior/il120s- 
-2003 .pdf. 
In the instant petition, the petitioner's tax returns indicate no income from activities other than from a trade or 
business and no additional relevant deductions. Therefore the figure for ordinary income on line 21 of page one 
of the petitioner's Form 1120s tax return for 2001 will be considered as the petitioner's net income for that year. 
That figure is shown in the table below. 
Tax Wage increase needed Surplus or 
year Net income to pay the proffered wage (deficit) 
200 1 $6,443.00 $21,528.00* $(15,085.00) 
2002 not submitted $2 1,528.00* no information 
* The full proffered wage, since the record contains no evidence of any wage 
payments made by the petitioner to the beneficiary. 
The above information is insufficient to establish the petitioner's ability to pay the proffered wage in either 
2001 or 2002, which are the two years at issue in the instant petition. 
Counsel states that the petitioner had substantial gross receipts or sales in 2001. Although counsel's assertion on 
that point is correct, CIS looks primarily to the petitioner's net income, rather than it gross receipts or sales when 
evaluating the petitioner's ability to pay the proffered wage. Moreover, the petitioner's gross sales or receipts are 
among the figures on the petitioner's tax return which are calculated in arriving at the figure for the petitioner's 
ordinary income figure, which is discussed above. 
Counsel also asserts that the petitioner's depreciation expenses should be considered as additional financial 
resources of the petitioner. While it is true that in any particular year a taxpayer's depreciation deductions may 
not reflect the taxpayer's actual cash operating expenses, depreciation deductions do reflect actual costs of 
operating a business, since depreciation is a measure of the decline in the value of a business asset over time. See 
Internal Revenue Service, Instructions for Form 4562, Depreciation and Amortization (Including Information on 
Listed Property) (2004), at 1-2, available at http://www.irs.gov/pub/irs-pdfli4562.pdf. 
For the foregoing reasons, when a petitioner chooses to rely on its federal tax returns as evidence of its ability to 
pay the proffered wage, CIS considers all of the petitioner's claimed tax deductions when evaluating the 
petitioner's net income. See Elatos Restaurant COT. 632 F. Supp. at 1054. If a petitioner does not wish to rely 
on its federal tax returns as evidence of its ability to pay the proffered wage, the petitioner is free to rely on one of 
the other alternative forms of required evidence as specified in the regulation at 8 C.F.R. tj 204.5(g)(2), namely, 
annual reports or audited financial statements. 
As an alternative means of determining the petitioner's ability to pay the proffered wages, CIS may review 
the petitioner's net current assets. Net current assets are a corporate taxpayer's current assets less its current 
EAC-04-030-50239 
Page 5 
liabilities. Current assets include cash on hand, inventories, and receivables expected to be converted to cash 
within one year. A corporation's current assets are shown on Schedule L, lines 1 through 6. Its current 
liabilities are shown on lines 16 through 18. If a corporation's net current assets are equal to or greater than 
the proffered wage, the petitioner is expected to be able to pay the proffered wage out of those net current 
assets. The net current assets are expected to be converted to cash as the proffered wage becomes due. Thus, 
the difference between current assets and current liabilities is the net current assets figure, which if greater 
than the proffered wage, evidences the petitioner's ability to pay. 
Calculations based on the Schedule L attached to the petitioner's tax return for 2001 yield the amount for 
year-end net current assets as shown in the following table. 
Tax 
year 
Net 
current Wage increase needed Surplus or 
assets to pay the proffered wage (deficit) 
200 1 $7,280.00 $21,528.00* $(14,248.00) 
2002 not submitted $21,528.00* no information 
* The full proffered wage, since the record contains no evidence of any wage 
payments made by the petitioner to the beneficiary. 
The above information is insufficient to establish the petitioner's ability to pay the proffered wage in either 
2001 or 2002. 
Counsel also asserts that funds in the amount of $20,139.00 spent on alteration work outsourced to an 
independent alteration tailor could have been saved if the beneficiary had been on the petitioner's payroll. 
Counsel's assertion as to the amount spent in 2001 on alteration work is supported by a line item in an 
attachment to the petitioner's Form 1120s U.S. Income Tax Return for an S Corporation for 2001 showing a 
deduction for that amount for alterations. However, no evidence in the record supports counsel's assertions 
that all of the money spent on alterations would have been saved if the beneficiary had been on the 
petitioner's payroll. The assertions of counsel do not constitute evidence. Matter of Obaigbena, 19 I&N Dec. 
533, 534 (BIA 1988); Matter of Ramirez-Sanchez, 17 I&N Dec. 503,506 (BIA 1980). The record lacks any letter 
of affidavit from the petitioner's owner stating how much of the money spent on outsourced alteration work 
would have been saved by having the beneficiary on the payroll and lacks any evidence giving details on the type 
of alteration work outsourced and on the identities of the companies or individuals who performed that work for 
the petitioner. 
Based on the foregoing analysis, the evidence in the record fails to establish the petitioner's ability to pay the 
proffered wage as of the priority date and continuing until the beneficiary obtains lawful permanent residence. 
In her decision, the director correctly stated the petitioner's net income in 2001 and correctly calculated the 
petitioner's year-end net current assets for that year. The director found that those amounts failed to establish 
the petitioner's ability to pay the proffered wage in 2001, which is the year of the priority date. The decision 
of the director to deny the petition was correct, based on the evidence in the record before the director. 
For the reasons discussed above, the assertions of counsel on appeal on appeal fail to overcome the decision 
of the director. 
EAC-04-030-50239 
Page 6 
The burden of proof in these proceedings rests solely with the petitioner. Section 291 of the Act, 8 U.S.C. 4 1361. 
The petitioner has not met that burden. 
ORDER: The appeal is dismissed.