dismissed EB-3 Case: Automotive

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prevent dearly unwarranted 
In'lraeb.olpreoarl@vacy 
pUBLiC COPY 
U.S. Department of Homeland Security 
20 Mass. Ave., N.W., Rm. A3042 
Washington, DC 20529 
U. S. Citizenship 
and Immigration 
Services hk- 
FILE: EAC-03-2 13-50436 Office: VERMONT SERVICE CENTER 
rN RE: 
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. § 1 153@)(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. 
~'obert P. Wiemann, Chief 
Administrative Appeals Office 
EAC-03-213-50436 
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 an auto center. It seeks to employ the beneficiary permanently in the United States as a 
mechanic. 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. 
The record shows that the appeal is properly filed, timely and makes a specific allegation of error in law or 
fact. The procedural history of this case is documented in the record and is incorporated into this decision. 
Further elaboration of the procedural history will be made only as necessary. 
As set forth in the director's October 12, 2004 denial, the single issue in this case is whether the evidence 
establishes the petitioner's ability to pay the proffered wage as of the priority date and continuing until the 
beneficiary obtains lawful permanent residence. 
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 or seasonal nature, for which qualified workers are not available in 
the United States. 
The regulation at 8 C.F.R. 5 204.5(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 profit/loss 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. 5 204.5(d). The priority date in the instant 
petition is April 30, 2001. The proffered wage as stated on the Form ETA 750 is $650.00 per week, which 
amounts to $33,800.00 annually. 
The AAO reviews appeals on a de novo basis. See Dorr v. I.N.S. 891 F.2d 997, 1002, n. 9 (2d Cir. 1989). 
The AAO considers all pertinent evidence in the record, including any new evidence properly submitted on 
appeal. 
In the instant appeal, the petitioner submits no brief and submits additional evidence. Relevant evidence 
submitted on appeal includes reviewed financial statements of the petitioner for 2001, 2002 and 2003. Other 
EAC-03-2 13-50436 
Page 3 
relevant evidence in the record includes copies of the petitioner's Form 1120s tax returns for 2001, 2002 and 
2003 and copies of compiled financial statements for those years. 
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. 9 103.2(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 (BIA 1988). 
On appeal, counsel states that the director declined to consider financial statements of the petitioner because 
they were not audited or reviewed statements. Counsel states that reviewed financial statements are being 
submitted on appeal which meet the evidentiary requirements of CIS as expressed in the director's decision. 
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. 
5 204.5(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 April 10, 2001, the beneficiary did not 
claim to have 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. Suva, 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, 719 F. Supp. 532 (N.D. Tex. 
1989); K. C.P. Food Co., Inc. v. Suva, 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 57 1 (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 Returns for an S Corporation for 2001, 2002 and 2003. The record before the director 
closed on August 27, 2004 with the receipt by the director of the petitioner's submissions in response to an RFE 
which had been issued by the director on June 2,2004. As of August 27,2004, the petitioner's federal tax return 
for 2003 was the most recent return available. 
EAC-03-2 13-50436 
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. 
An S corporation's total income from its various sources are reported on lines 1 through 6 of the Schedule K, 
Shareholders' Shares of Income, Credits, Deductions, etc. See Internal Revenue Service, Instructions for Form 
1120s (2003), available at http://www.irs.gov/pub/irs-prior/i1120s--2003.pdf; Instructions for Form 1 120s 
(2002), available at http://www.irs.gov/pub/irs-priorli 1 120s--2002 .pdf. 
Similarly, some deductions appear only on the Schedule K. The cost of business property elected to be treated an 
expense deduction under Section 179 of the Internal Revenue Code, rather than as a depreciation deduction, is 
carried over from line 12 of the Form 4562 to line 8 of the Schedule K. See Internal Revenue Service, 
Instructions for Form 4562 (2003), at 1, available at http://www.irs.gov/pub/irs-priorli4562--2OO.pdfi Internal 
Revenue Service, Instructions for Form 1 120s (2003), at 22, available at http://www.irs.gov/pub/irs-prior/i1120s- 
-2003 .pdf. 
In the instant petition, the petitioner's tax returns indicate income from activities other than from a trade or 
business and additional relevant deductions. Therefore the figures for ordinary income on line 21 of page one of 
the petitioner's Form 1120s tax returns do not include portions of the petitioner's income or all of its relevant 
deductions. For this reason, the petitioner's net income each year must be considered as the amount found on 
Line 23 of the Schedule K, for income. Thos amounts are shown in the table below. 
Tax Net income Wage increase needed Surplus or 
year or (loss) to pay the proffered wage (deficit) 
* 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 any of 
the years at issue in the instant petition. 
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 
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's attached to the petitioner's tax returns yield the amounts for year-end 
net current assets as shown in the following table. 
EAC-03-2 13-50436 
Page 5 
Net 
Tax current Wage increase needed Surplus or 
year assets to pay the proffered wage (deficit) 
* The full proffered wage, since the record contains no evidence of any wage 
payments made by the petitioner to the beneficiary. 
The record also contains copies of unaudited financial statements. Unaudited financial statements are not 
persuasive evidence. According to the plain language of 8 C.F.R. 9 204.5(g)(2), where the petitioner relies on 
financial statements as evidence of a petitioner's financial condition and of its ability to pay the proffered 
wage, those statements must be audited. Unaudited statements are the unsupported representations of 
management. The unsupported representations of management are not persuasive evidence of a petitioner's 
ability to pay the proffered wage. 
The unaudited financial statements which were submitted in response to the RFE are compiled financial 
statements. Accompanying one of those statements is a letter March 3 1, 2002 from accounting firm which 
states the following: "A compilation is limited to presenting in the form of financial statements information 
that is the representation of management. We have not audited or reviewed the accompanying financial 
statements and, accordingly, do not express an opinion or any other form of assurance on them." (Letter from 
Hi Tech Accounting, Inc., March 3 1,2002). 
The unaudited financial statements which were submitted on appeal are reviewed financial statements. 
Accompanying one of those statements is a letter dated November 4, 2004 which states the following: 
A review consists principally of inquiries of company personnel and analytical procedures 
applied to financial data. It is substantially less in scope than an audit in accordance with 
generally accepted auditing standards, the objective of which is the expression of an opinion 
regarding the financial statements taken as a whole. Accordingly, we do not express such an 
opinion. 
(Letter from Hi Tech Accounting, Inc., November 4,2004). 
Although the reviewed financial statements submitted on appeal have been examined more closely by 
accountants than the compiled financial statements which were submitted prior to the director's decision, the 
financial statements submitted on appeal nonetheless fail to satisfy the evidentiary standard in the regulation, 
which specifies audited financial statements as one of the three alternative forms of required evidence. The 
other two alternative forms of required evidence are copies of annual reports and copies of federal tax returns. 
See 8 C.F.R. 
 204.5(g)(2). 
 Therefore, the reviewed financial statements are not an acceptable form of 
evidence to establish the petitioner's ability to pay the proffered wage. 
The record contains no other evidence relevant to the petitioner's financial situation. 
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. 
EAC-03-213-50436 
Page 6 
In her decision, the director correctly stated the petitioner's net income in 2001, 2002 and 2003, based on the 
petitioner's federal tax returns. The director also correctly calculated the petitioner's year-end net current 
assets for each of those years, again based on the tax returns. The director found that those amounts failed to 
establish the petitioner's ability to pay the proffered wage in those years. The director found that the compiled 
financial statements in the record were not an acceptable form of evidence. 
In her decision the director stated, "To establish your ability to pay the proffered wage, you were requested to 
submit tax returns, audited or reviewed financial statements or evidence that you employed the beneficiary 
during 2001." (Director's decision, October 12, 2004, at 1). The reference to "reviewed" financial statements 
by the director did not conform to the regulatory requirement, which requires audited financial statements. 
The analysis of the director was therefore incorrect on that point. Nonetheless, the decision of the director to 
deny the petition was correct, based on the evidence in the record before the director, specifically, the 
petitioner's tax returns. 
For the reasons discussed above, the assertions of counsel on appeal and the evidence submitted on appeal fail 
to overcome the decision of the director. 
The burden of proof in these proceedings rests solely with the petitioner. Section 291 of the Act, 8 U.S.C. tj 1361. 
The petitioner has not met that burden. 
ORDER: The appeal is dismissed.