dismissed EB-3 Case: Auto Repair

identifying data deld 
Pm vent clearly unwarranted invasion of # FVSY 
U.S. Department of Homeland Security 
20 Mass. Ave., N.W., Rm. 3000 
Washington, DC 20529 
U.S. Citizenship 
and Immigration 
Services 
FILE: Office: VERMONT SERVICE CENTER Date: OCT 2 4 2~6 
EAC-04-207-5 1300 
PETITION: Immigrant 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. 
Robert P. Wiemann, Chief 
Administrative Appeals Office 
EAC-04-207-5 1300 
Page 2 
DISCUSSION: The preference visa petition was denied by the Center Director (Director), Vermont Service 
Center, and is now before the Administrative Appeals Office (AAO) on appeal. The appeal will be dismissed. 
The petitioner is an auto repair and leasing company. It seeks to employ the beneficiary permanently in the 
United States as an automobile body repairer. As required by statute, the petition is accompanied by a Form 
ETA 750, Application for Alien Employment Certification (labor certification application or Form ETA 750), 
approved by the Department of Labor. 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. 
Counsel filed a timely appeal with a brief and additional evidence.' 
Section 203(b)(3)(A)(i) of the Immigration and Nationality Act (the Act), 8 U.S.C. 5 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 nature, for which qualified workers are not available in the United 
States. 
The regulation 8 C.F.R. tj 204.5(g)(2) states in pertinent part: 
Ability of 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 in the form of copies of annual reports, federal tax returns, or audited financial 
statements. 
The petitioner must demonstrate the continuing ability to pay the proffered wage beginning on the priority 
date, which is the date the Form ETA 750 Application for Alien Employment Certification, was accepted for 
processing by any office within the employment system of the U.S. Department of Labor. See 8 CFR 
5 204.5(d). The petitioner must also demonstrate that, on the priority date, the beneficiary had the qualifications 
stated on its Form ETA 750 Application for Alien Employment Certification as certified by the U.S. Department 
of Labor and submitted with the instant petition. Matter of Wing's Tea House, 16 I&N Dec. 158 (Act. Reg. 
Comm. 1977). 
Here, the Fonn ETA 750 was accepted on April 10, 2001. The proffered wage as stated on the Form ETA 
750 is $22.36 per hour ($40,695.20 per year2). The Form ETA 750 states that the position requires two (2) 
The submission of additional evidence on appeal is allowed by the instructions to the Form I-290B, which 
are incorporated into the regulations by the regulation at 8 C.F.R. tj 103.2(a)(l). The record in the instant case 
provides no reason to preclude consideration of any of the documents newly submitted on appeal. See Matter 
of Soriano, 19 I&N Dec. 764 (BZA 1988). The AAO will first evaluate the decision of the director, based on the 
evidence submitted prior to the director's decision. The evidence submitted for the first time on appeal will then 
be considered. 
Based on working 35 hours per week. The petitioner mistakenly claimed the weekly wage of $894.40 on 
the Form 1-140 and accordingly the director miscalculated the beneficiary's annual salary as $46,509. 
EAC-04-207-5 1300 
Page 3 
years experience in the job offered. On the Form ETA 750B signed by the beneficiary on April 5, 2001, the 
beneficiary claimed to have worked for the petitioner since February 2001. On the petition, the petitioner 
claimed to have been established in 2000, and to currently employ six (6) workers. The petitioner did not 
provide information on its gross annual income and net annual income on the form. 
With the petition, the petitioner submitted its Form 1120, U.S. Corporation Income Tax Return for 2001 and 
2002, bank statements for its business checking account for January and February 2004, and the beneficiary's 
W-2 forms for 2001 through 2003 pertinent to the petitioner's ability to pay the proffered wage. 
The director denied the petition on January 21, 2005, finding that the evidence submitted with the petition did 
not establish that the petitioner had the continuing ability to pay the proffered wage beginning on the priority 
date. 
On appeal, counsel asserts that the costs of labor paid by the petitioner, loans from shareholders and retained 
earnings should be considered as part of funds available to pay the proffered wage. 
In determining the petitioner's ability to pay the proffered wage during a given period, Citizenship and 
Immigration Services (CIS) will first examine whether the petitioner employed and paid the beneficiary during 
that period. If the petitioner establishes by documentary evidence that it employed the beneficiary at a salary 
equal to or greater than the proffered wage, the evidence will be considered prima facie proof of the petitioner's 
ability to pay the proffered wage. Counsel asserts that the costs of labor paid out by the petitioner would be 
available to pay the beneficiary the proffered wage. Counsel's reliance on costs of labor paid out by the petitioner 
is misplaced. In general, wages already paid to others are not available to prove the ability to pay the wage proffered 
to the beneficiary at the priority date of the petition and continuing to the present. The record contains copies of 
Form W-2 Wage and Tax Statements of the beneficiary. The beneficiary's Form W-2's for 2001 through 2004 
show compensation received from the petitioner, as shown in the table below. 
Wage increase 
Beneficiary's actual needed to pay 
Year compensation Proffered wage the proffered wage. 
The above information is insufficient to establish the petitioner's ability to pay the proffered wage in any of 
the years at issue in the instant petition. Instead, the petitioner is obligated to demonstrate that it could pay 
the difference between wages actually paid to the beneficiary and the proffered wage. 
If the petitioner does not establish that it employed and paid the beneficiary an amount at least equal to the 
proffered wage during that period, CIS will next examine the net income figure reflected on the petitioner's 
federal income tax return, 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 Woodcrafi Hawaii, Ltd. v. Feldman, 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., Inc. v. Sava, 623 F. Supp. 1080 
(S.D.N.Y. 1985); Ubeda v. Palmer, 539 F. Supp. 647 (N.D. 111. 1982), aff'd, 703 F.2d 571 (7th Cir. 1983). 
EAC-04-207-5 1300 
Page 4 
Reliance on the petitioner's gross receipts, depreciation/amortization deduction or 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., Inc. v. Sava, 623 F. Supp. at 1084, 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. The court specifically rejected the 
argument that the Service should have considered income before expenses were paid rather than net income. 
The court in Chi-Feng Chang further noted: 
Plaintiffs also contend the depreciation amounts on the 1985 and 1986 returns are non-cash 
deductions. Plaintiffs thus request that the court sua sponte add back to net cash the 
depreciation expense charged for the year. Plaintiffs cite no legal authority for this 
proposition. This argument has likewise been presented before and rejected. See Elatos, 632 
F. Supp. at 1054. [CIS] and judicial precedent support the use of tax returns and the net 
income figures 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. 
(Emphasis in original.) Chi-Feng at 537. 
The record of proceeding contains copies of the petitioner's Form 1120, U.S. Corporation Income Tax 
Return, for 2001 and 2002. The tax return shows that the petitioner is structured as a C corporation and the 
petitioner's fiscal year is based on a calendar year. The 2001 tax return demonstrates the petitioner's net 
income3 of $(70,017); and the 2002 tax return demonstrates the petitioner's net income of $(27,403). 
Therefore, the petitioner did not have sufficient net income to pay the difference of $16,503.20 in 2001 and 
$1 1,255.20 in 2002 respectively between wages actually paid to the beneficiary and the proffered wage. 
If the net income the petitioner demonstrates it had available during that period, if any, added to the wages 
paid to the beneficiary during the period, if any, do not equal the amount of the proffered wage or more, CIS 
will review the petitioner's assets. The petitioner's total assets include depreciable assets that the petitioner 
uses in its business. Those depreciable assets will not be converted to cash during the ordinary course of 
business and will not, therefore, become funds available to pay the proffered wage. Further, the petitioner's 
total assets must be balanced by the petitioner's liabilities. Otherwise, they cannot properly be considered in 
the determination of the petitioner's ability to pay the proffered wage. Rather, CIS will consider net current 
assets as an alternative method of demonstrating the ability to pay the proffered wage. 
Net current assets are the difference between the petitioner's current assets and current liabilitie~.~ 
 A 
corporation's year-end current assets are shown on Schedule L, lines 1 through 6. Its year-end current 
liabilities are shown on lines 16 through 18. If the total of a corporation's end-of-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 net current 
assets were $(69,027) in 2001 and $(94,394) in 2002. Therefore, the petitioner had insufficient net current 
3 
 Taxable income before net operating loss deduction and special deductions as reported on Line 28. 
4 
According to Barron 's Dictionary of Accounting Terms 1 17 (3rd ed. 2000), "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). Id. at 118. 
EAC-04-207-5 1300 
Page 5 
assets to pay the difference between wages actually paid to the beneficiary and the proffered wage in 2001 or 
2002. 
The petitioner must demonstrate this ability at the time the priority date is established and continuing until the 
beneficiary obtains lawful permanent residence. The record before the director in the instant case closed on 
July 7, 2004 when the instant petition was filed. By that time, the petitioner's 2003 tax return should have 
been available. However, the petitioner did not submit its tax return or other regulatory-prescribed evidence of 
its ability to pay the proffered wage for 2003. Nor did the petitioner explain why the 2003 tax return was not 
submitted. Counsel did not submit the petitioner's tax return for 2003 while the beneficiary's W-2 forms for 
2004 was provided with the brief for appeal on March 16,2005. The burden of proof in these proceedings rests 
solely with the petitioner. Section 291 of the Act, 8 U.S.C. 3 1361. Therefore, the petitioner failed to establish 
its ability to pay the difference between wages actually paid to the beneficiary and the proffered wage for 2003. 
Therefore, from the date the Form ETA 750 was accepted for processing by the U. S. Department of Labor, 
the petitioner had not established that it had the continuing ability to pay the beneficiary the difference 
between the wage paid and 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. 
The record contains copies of bank statements for the petitioner's business checking account. Counsel's 
reliance on the balance in the petitioner's bank account is misplaced. First, bank statements are not among the 
three types of evidence, enumerated in 8 C.F.R. 3 204.5(g)(2), required to illustrate a petitioner's ability to pay a 
proffered wage. While this regulation allows additional material "in appropriate cases," the petitioner in this case 
has not demonstrated why the documentation specified at 8 C.F.R. 8 204.5(g)(2) is inapplicable or otherwise 
paints an inaccurate financial picture of the petitioner. Second, bank statements show the amount in an account 
on a given date, and cannot show the sustainable ability to pay a proffered wage. Third, no evidence was 
submitted to demonstratethat the funds reported on the petitioner's bank statements somehow reflect additional 
available funds that were not reflected on its tax return, such as the petitioner's taxable income (income minus 
deductions) or the cash specified on Schedule L that was considered in determining the petitioner's net current 
assets. 
Counsel recommends the use of retained earnings to pay the proffered wage. Retained earnings are the total 
of a company's net earnings since its inception, minus any payments to its stockholders. That is, this year's 
retained earnings are last year's retained earnings plus this year's net income. Adding retained earnings to net 
income andlor net current assets is therefore duplicative. Therefore, CIS looks at each particular year's net 
income, rather than the cumulative total of the previous years' net incomes represented by the line item of 
retained earnings. 
Further, even if considered separately from net income and net current assets, retained earnings might not be 
included appropriately in the calculation of the petitioner's continuing ability to pay the proffered wage 
because retained earnings do not necessarily represent fbnds available for use. Retained earnings can be 
either appropriated or unappropriated. Appropriated retained earnings are set aside for specific uses, such as 
reinvestment or asset acquisition, and as such, are not available for shareholder dividends or other uses. 
Unappropriated retained earnings may represent cash or non-cash and current or non-current assets. The 
record does not demonstrate that the petitioner's retained earnings are unappropriated and are cash or current 
assets that would be available to pay the proffered wage. 
Counsel's assertion that loans from shareholders are not actual current debts, and are funds available to pay 
the deficit in the proffered wage amount is misplaced. As previously discussed, CIS considers net current 
EAC-04-207-5 1300 
Page 6 
assets as an alternative method to determine the petitioner's ability to pay. Net current assets are from current 
assets minus current liabilities. However, loans from shareholders are neither a part of current assets nor part 
of current liabilities. Therefore, loans from shareholders will not increase or decrease the petitioner's net 
current assets, and will not affect the petitioner's ability to .pay the proffered wage. 
Counsel cites to Matter of Sonegawa, 12 I&N Dec. 612 (BIA 1967), which relates to petitions filed during 
uncharacteristically unprofitable or difficult years but only in a framework of profitable or successful years. 
The petitioning entity in Sonegawa had been in business for over 11 years and routinely earned 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 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. 
No unusual circumstances have been shown to exist in this case to parallel those in Sonegawa, nor has it been 
established that 2001 and 2002 were two uncharacteristically unprofitable years for the petitioner in a 
framework of profitable or successful years. 
Counsel's assertions on appeal cannot be concluded to outweigh the evidence presented in the tax return as 
submitted by the petitioner that demonstrates that the petitioner could not pay the proffered wage from the day 
the Form ETA 750 was accepted for processing by any office within the employment system of the 
Department of Labor. 
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, 8 U.S.C. 
9 1361. The petitioner has not met that burden. 
ORDER: The appeal is dismissed.