dismissed EB-3 Case: Automotive Repair

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PUBLIC COPY 
U.S. Department of Homeland Security 
20 Mass. Ave., N.W., Rm. A3042 
Washington, DC 20529 
U.S. Citizenship 
and Immigration 
86. 
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(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 
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 an auto repair company. It seeks to employ the beneficiary permanently in the United States 
as an automotive body repairer. 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. 9 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 slulled 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. Section 203@)(3)(A)(ii) of the Act provides for the granting of preference classification to qualified 
immigrants who hold baccalaureate degrees and who are members of the professions. 
The regulation at 8 C.F.R. 8 204.5(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 profitlloss 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. fj 204.5(d). The priority date in the instant 
petition is April 26, 2001. The proffered wage as stated on the Form ETA 750 is $19.33 per hour, which 
amounts to $40,206.40 annually. On the Form ETA 750B, signed by the beneficiary on July 13, 2002, the 
beneficiary claimed to have worked for the petitioner beginning in September 1999 and continuing through 
the date of the ETA 750B. The ETA 750 was certified by the Department of Labor on March 17,2003. 
The 1-140 petition was submitted on May 12, 2003. On the petition, the petitioner claimed to have been 
established in May 1974, to currently have two employees and to have a gross annual income of $328,235.00. 
The item on the petition for net annual income was left blank. With the petition, the petitioner submitted 
supporting evidence. 
In a request for evidence (RFE) dated November 22,2003, the director requested additional evidence relevant 
to the petitioner's continuing ability to pay the proffered wage beginning on the priority date. 
In response to the RFE, the petitioner submitted additional evidence. The petitioner's submissions in response 
to the RFE were received by the director on May 2 1,2004. 
- Page 3 
In a decision dated May 26, 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 no brief and submits additional copies of documents previously submitted in 
evidence. 
On the I-290B, signed by counsel on June 25, 2004, counsel checked the block indicating that she would be 
sending a brief and/or evidence to the AAO within 30 days. However, no f!urther documents have been received 
by the AAO to date. 
Counsel states on appeal that the evidence indicates that the petitioner's net current assets are equal to or greater 
than the proffered wage. Counsel also states that the petitioner has been in business since 1974. 
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. 
6 12 (Reg. Cornm. 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 July 13,2002, the beneficiary claimed to have 
worked for the petitioner beginning in September 1999 and continuing through the date of the ETA 750B. 
However, the record contains no other evidence corroborating the beneficiary's claim of employment by the 
petitioner and no evidence indicating the amount of any compensation paid by the petitioner to the beneficiary. 
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 Coy. 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, 719 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 three copies of the petitioner's 
Form 1120s U.S. Income Tax Return for an S Corporation for 2001. The record before the director closed on 
May 21, 2004 with the receipt by the director of the petitioner's submissions in response to the RFE. As of that 
date the petitioner's federal tax returns for 2002 and 2003 should have been available, but copies of those returns 
were not submitted for the record prior to the decision of the director, nor have copies of those returns been 
submitted on appeal. 
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/i1120s--2003.pdf; Instructions for Form 1 120s (2002), available at http://www.irs.gov/pub/irs-prior/i1120s- 
-2002.pdf. 
 Similarly, some deductions appear only on the Schedule K. 
 See Internal Revenue Service, 
Instructions for Form 4562 (2003), at 1, available at http://www.irs.gov/pub/irs-priorli4562--2003.pdC Internal 
Revenue Service, Instructions for Form 1 120s (2003), at 22, available at http://www.irs.gov/pub/irs-prior/i1120s- 
-2003 .pdf. 
Where the Schedule K has relevant entries for either additional income or additional deductions, net income is 
found on Line 23 of the Schedule K, for income. 
In the instant petition, the petitioner's tax return for 2001 indicates 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 will be considered as the petitioner's net income. The 
petitioner's tax return for 200 1 states the amount for ordinary income as shown in the table below. 
Tax Wage increase needed Surplus or 
year Net income to pay the proffered wage deficit 
200 1 -$2,257.00 $40,206.40* -$43,657.40 
2002 not submitted $40,206.40* no information 
2003 not submitted $40,206.40* 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 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. 
Page 5 
Calculations based on the Schedule L attached to the petitioner's tax return for 2001 yield the amounts for net 
current assets as shown in the following table. 
Tax Net Current Assets Wage increase needed 
year Beginning of year End of year to pay the proffered wage 
200 1 $193.00 -$3,45 1 .OO $40,206.40* 
2002 not submitted not submitted $40,206.40* 
2003 not submitted not submitted $40,206.40* 
* 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. 
Counsel states that the petitioner has been in business since 1974. The petitioner's Form 1120s tax return for 
2001 states that the petitioner's effective date of election as an S corporation was January 24, 1996. Under the 
principles of Matter of Sonegawa, 12 I&N Dec. 612 (Reg. Comm. 1967), CIS may consider the totality of the 
circumstances affecting the petitioner's ability to pay the proffered wage. However, in the instant case, the 
record contains no evidence relevant to the petitioner's financial condition other than the petitioner's Form 
1120s tax return which is discussed above. The record therefore lacks sufficient evidence for an analysis 
under the principles of Matter of Sonegawa. 
The evidence in the record therefore 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 found that that amount 
failed to establish the petitioner's ability to pay the proffered wage in 2001. The director also considered the 
petitioner's net assets, but the director's decision fails to distinguish between net total assets and net current 
assets. The director also noted the absence of financial information for the years 2002 and 2003. 
Notwithstanding the director's improper analysis of the issue of the petitioner's year-end net current assets, 
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 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. 3 1361. 
The petitioner has not met that burden. 
ORDER: The appeal is dismissed.