dismissed EB-3 Case: Automotive Mechanic

identifyins datr deleted to 
privacy 
PUBLIC COPY 
U.S. Department of IIomeland Security 
20 Mass. Ave , N.W., Rm. 3000 
Wash~ngton, DC 20529 
U. S. Citizenship 
and Immigration 
Services 
File: EAC-04-195-52076 Office: VERMONT SERVICE CENTER Date: 
 1 9 2006 
In re: Petitioner: 
Beneficiary: 
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. tj, 1 153(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. ., 
~obert P. Wiemann, Chief 
Administrative Appeals Office 
EAC-04-195-52076 
Page 2 
DISCUSSION: The Director, Vermont Service Center, denied the immigrant visa petition. The matter is 
now before the Administrative Appeals Office (AAO) on appeal. The appeal will be dismissed. 
The petitioner is a gas and service station and seeks to employ the beneficiary permanently in the United 
States as an auto mechanic. As required by statute, the petition filed was submitted with Form ETA 750, 
~~~lication' for Alien Employment Certification, approved by the Department of Labor (DOL). As set forth 
in the director's February 18,2005 denial, the case was denied based on the petitioner's failure to demonstrate 
its ability to pay the proffered labor certification wage fi-om the priority date until the beneficiary obtains 
permanent residence. 
The AAO takes a de novo look at issues raised in the denial of this petition. See Dor v. INS, 891 F.2d 997, 
1002 n. 9 (2d Cir. 1989) (noting that the AAO reviews appeals on a de novo basis). The AAO considers all 
pertinent evidence in the record, including new evidence properly submitted upon appeal.' 
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. 
The petitioner has filed to obtain permanent residence and classify the beneficiary as a shlled worker. 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 shlled 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 petitioner must establish that its ETA 750 job offer to the beneficiary is a realistic one. A petitioner's filing 
of an ETA 750 labor certification application establishes a priority date for any immigrant petition later filed 
based on the approved ETA 750. The priority date is the date that Form ETA 750 Application for Alien 
Employment ~ertific'ation was accepted for processing by any office within the employment service system 
of the Department of Labor. See 8 CFR $ 204.5(d). Therefore, 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. $ 204.5(g)(2). 
The regulation 8 C.F.R. $ 204.5(g)(2) states in pertinentpart: 
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. 
1 
 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. $ 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). 
EAC-04-195-52076 
Page 3 
/ 
In the case at hand, the petitioner filed Form ETA 750 with the relevant state workforce agency on March 21, 
2002. The proffered wage as stated on Form ETA 750 for the position,of an auto mechanic is $19.1 1 per 
hour, 35 hours per week, with allowed overtime as needed. The basic rate would be equivalent to $34,780.20 
per year. The labor certification was approved on January 6, 2004, and the petitioner filed the 1-140 on the 
beneficiary's behalf on June 17, 2004. On the 1-140, counsel listed the following information related the 
petitioning entity: date established: November 1995; gross annual income: not listed; net annual income: not 
listed; and current number of employees: not listed. 
On February 18, 2005, the case was denied base on the petitioner's inability to demonstrate that it could pay 
the proffered wage from the priority date until the beneficiary obtains lawful permanent residence. The 
petitioner appealed to the AAO. We will examine the petitioner's ability to pay based on standards 
enumerated and then consider the petitioner's additional arguments on appeal. 
First, in determining the petitioner's ability to pay the proffered wage during a given period, Citizenship & 
Immigration Services (CIS) will examine whether the petitioner employed and paid the beneficiary during 
that period. If the petihoner 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. 
In the case at hand, on Form ETA 750B, signed by the beneficiary on February 1, 200 1, the beneficiary did 
not list that he was employed with the petitioner. Both the ETA 750 and the 1-140 reflect that the beneficiary 
I 
is still in his home country and will obtain his immigrant visa abroad, when available, if the case is approved. 
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 fibre reflected on the petitioner's 
federal income tax return. 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 (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. Ill. 
1982), afd, 703 F.2d 571 (7th Cir. 1983). 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 2002 federal ,tax return submitted demonstrates the following financial information concerning the 
petitioner's ability to pay the proffered wage of $34,780.20 per year from the priority date. The record 
demonstrates that the petitioner is an S corporation. Where an S corporation's income is exclusively fiom 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. Line 21 indicates ordinary income as follows: 
Tax year 
 Net income or (loss) 
2002~ -23,501 
The petitioner did not submit its 2003 tax return, which should have been available at the time of filing the 
I- 140 petition. / 
L 
EAC-04-195-52076 
Page 4 
The petitioner's net income would not allow for payment of the benefic~ary's proffered wage from the pnonty 
date until the beneficiary obtains permanent residence. The petitioner failed to submit tax returns or other 
evidence for 2003. 
As an alternative means of determining the petitioner's ability to pay the pr6ffered wages, CIS may review 
the petitioner's net current assets. Net current assets are the difference between the petitioner's current assets 
and 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 on the Forms 1120s. 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, and evidences the petitioner's ability to pay. The net current assets would 
be converted to cash as the proffered wage becomes due. 
Tax year Net current assets 
I 
2002 -$24,734 
Following this analysis, the petitioner's federal tax return shows that the petitioner similarly lacks the ability 
to pay the proffered wage. 
On appeal, counsel provides that "based on the 2002 tax return submitted with the petition, employer had the 
ability to pay. The Service denied before giving us an opportunity to demonstrate the ability by analyzing the 
tax return." As noted above, the petitioner's 2002 federal tax return demonstrates both negative net income, 
and negative net current assets, and would not demonstrate the petitioner's ability to pay. 
Counsel contends that the petitioner's 2002 federal tax return reflects retained earnings of $107,5 12, which "is 
surplus of [the] previous year that [the] company has retained and could have used if needed." 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 ilicomes 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 funds 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 also argues that the petitioner's depreciation listed on its 2002 federal tax return in the amount of 
$21,287 should be "added to its income," and be used in connection with the petitioner's retained earnings to 
show the petitioner's ability to pay the proffered wage. 
With respect to depreciation, depreciation as a tax concept 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 
e Page 5 
(Including Information on Listed Pr~perty)~(2004), at 1-2, available at http://www.irs.gov/pub/irs-pdUi4562.pdf. 
Therefore, depreciation is a real cost of doing busmess. 
The depreciation argument has previously been addressed by courts, and dismissed thls argument accordingly. 
The court in Chi-Feng Chang v. Thornburgh, 7 19 F. Supp. 532 (N.D. Texas 1989) 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. Plaintiffs7 argument that these 
figures should be revised by the court by adding back depreciation is without support. 
(Emphasis in original.) Chi-Feng at 537. 
Therefore, the AAO is not persuaded that the petitioner's depreciation can show its ability to pay the 
proffered wage, which even if accepted, would not demonstrate the petitioner's ability to pay the proffered 
wage. Further, as noted above, CIS considers net income and net current assets rather than retained earnings 
to reflect the petitioner's net income. Thei-efore, retained earnings cannot be combined with depreciation to 
demonstrate the petitloner's ability to pay the beneficiary the proffered wage. 
The petitioner did not provide any further documentation or analysis to demonstrate the petitioner's ability to 
pay the beneficiary the proffered wage from the priority date until the, beneficiary obtains permanent 
residence. 
Based on the foregoing, we find that the petitioner has failed to document that it can pay the beneficiary the 
proffered wage from the priority date until the beneficiary obtains permanent residence. Accordingly, the 
petition was properly denied. 
The burden of proof in these proceedings rests solely with the petitioner. Section 291 of the Act, 8 U.S.C. 
5 1361. The petitioner has not met that burden. 
ORDER: The appeal is dismissed.