dismissed EB-3 Case: Beautician

identifying data deleted to 
prevent clearly unwarranted 
invasion of personal privacj 
PUBLIC COPY 
U.S. Department of Homeland Security 
20 Mass. Ave., N.W., Rm. 3000 
Washington, DC 20529 
U. S. Citizenship 
and Immigration 
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. 5 1153(b)(3) 
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 
DISCUSSION: The director, Vermont Service Center, denied the preference visa petition. The matter is 
presently before the Administrative Appeals Office (AAO). The appeal will be dismissed. 
The petitioner is a beauty parlor. It seeks to employ the beneficiary permanently in the United States as a 
beautician. As required by statute, the petition is accompanied by a Form ETA 750, Application for Alien 
Employment Certification, 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 during the 2001 
priority date year. The director 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 hstory 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. 
As set forth in the director's November 4, 2005 denial, the single issue in this case is whether or not the 
petitioner has the 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. $ 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. 5 204.5(g)(2) states in pertinent part: 
Ability of prospective employer to pay wage. Any petition filed by or for an employment- 
based immigrant whlch 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 
9 204.5(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 Form ETA 750 was accepted on April 25,2001. The proffered wage as stated on the Form ETA 750 
is $12.52 per hour ($26,041.60 per year). The Form ETA 750 states that the position requires two years of 
experience in the proffered position. 
The AAO takes a de novo look at issues raised in the denial of ths 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 
Page 3 
pertinent evidence in the record, including new evidence properly submitted upon a eal. Counsel submits a 
letter fkom a certified public accountant, in Iselin, New Jersey. states that the 
petitioner paid management fees of $45,000 t orporation owned entirely by 
submits a copy o 
 tax return for 2001 on Form 
1065, U.S. Return of Partnership Income. Form 1055, Partnership Information, contained within the tax 
return, indicates that has a 60 share in ihe profits. 
Counsel also 
 Form 1120s for tax year 2001. This tax return indicates that 
is a 75 per cent shareholder in the petitioner. It is noted that the petitioner's 2002 tax return 
indicates that 
 is a 60 percent shareholder, while the 2003 tax return indicates that he is a 50 percent 
. ** 
shareholder. 
Other relevant evidence in the record includes an unaudited accountant's compilation report for tax year 200 1, 
dated August 29, 2005, compiled by 
rn 
The petitioner also submitted a letter in response to the 
director's request for further evidence 
 a s a e the beneficiary did not have a social security number and 
that she was not paid any wages in 2001. The record does not contain any other evidence relevant to the 
petitioner's ability to pay the wage. 
The evidence in the record of proceeding shows that the petitioner is structured as an S corporation. On the 
petition, the petitioner claimed to have been established on March 1, 1992, and to currently have 5 employees 
and a gross annual income of $315,101. On the Form ETA 750B, signed by the beneficiary on March 14, 
200 1, the beneficiary claimed to have worked for the petitioner since November 2000. 
On appeal, counsel asserts that the documentation submitted to the record establishes that the petitioner has 
the ability to pay the proffered wage in tax years 2002, 2003 and 2004 based on its tax returns. Counsel also 
asserts that the additional documentation submitted on appeal will establish the petitioner's ability to pay the 
proffered wage in the priority year of 2001. 
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 lawhl 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. !j 204.5(g)(2). In 
evaluating whether a job offer is realistic, Citizenship and Immigration Services (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. 61 2 (Reg. Comrn. 1967). 
With regard to the 2001 financial report, prepared by and submitted in response to the director's 
request for further evidence, dated June 1, 2005, the regulation at 8 C.F.R. 8 204.5(g)(2) makes clear that 
where a petitioner relies on financial statements to demonstrate its ability to pay the proffered wage, those 
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. 5 103.2(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 
financial statements must be audited. An audit is conducted in accordance with generally accepted auditing 
standards to obtain a reasonable assurance that the fmancial statements of the business are free of material 
The unaudited fi 
report that accompanied 
compilation rather than an audit. 
nancial statement that counsel submitted is not persuasive evidence. 
this financial statement makes clear that it was produced pursuant to a 
As the accountant ' s report also makes clear, fmancial statements produced 
pursuant to a compilation are the representations of management compiled into standard form. 
 The 
unsupported representations of management are not reliable evidence and are insufficient to demonstrate the 
ability to pay the proffered wage. 
In determining the petitioner's ability to pay the proffered wage during a given period, 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. In the 
instant case, although the beneficiary indicated on the Form ETA 750 that she began working for the 
petitioner in November 2000, the petitioner stated that she did not have a social security number and did not 
receive wages in 200 1. Thus the record is inconsistent with regard to any 2001 employment of the beneficiary 
by the petitioner. Matter of Ho, 19 I&N Dec. 582, 591-592 (BIA 1988) states: "It is incumbent on the 
petitioner to resolve any inconsistencies in the record by independent objective evidence, and attempts to 
explain or reconcile such inconsistencies, absent competent objective evidence pointing to where the truth, in 
fact, lies, will not suffice." For purposes of these proceedings, the petitioner has not established that it 
employed and paid the beneficiary the full proffered wage as of the 2001 priority year and onward. Thus, the 
petitioner has to establish its ability to pay the entire proffered wage as of the 2001 and until the beneficiary 
obtains lawlful permanent residence. 
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. 1 049, 1 054 (S.D.N.Y. 1 986) 
(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), affd, 703 F.2d 571 (7th Cir. 1983). 
Reliance on the petitioner's gross receipts and 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 Wher 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 
Page 5 
income Jigures 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 tax returns demonstrate the following financial information concerning the petitioner's ability to pay the 
proffered wage of $26,041.60 per year from the priority date: 
In 2001, the Form 1 120s stated net income3 of $5,042. 
In 2002, the Form 1 120s stated net income of $64,224. 
In 2003, the Form 1 120s stated net income of $50,5 13. 
Therefore, for the years 2002 and 2003, the petitioner does have sufficient net income to pay the proffered 
wage of $26,041.60. However, the petitioner did not establish its ability to pay the entire proffered wage 
based on its net income for priority year 2001. 
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, including real property that counsel asserts should be considered. 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 liabilitied 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. 
3 
 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 IRS Form 1 120s. However, 
where an S corporation has income, credits, deductions or other adjustments from sources other than a trade 
or business, they are reported on Schedule K. If the Schedule K has relevant entries for additional income, 
credits, deductions or other adjustments, net income is found on line 23 (1997-2003) line 17e (2004-2005) 
line 18 (2006) of Schedule K. See Instructions for Form 11205, 2006, at http://www.irs.gov/pub/irs- 
pdflill20s.pdf (accessed March 22, 2007) (indicating that Schedule K is a summary schedule of all 
shareholder's shares of the corporation's income, deductions, credits, etc.). Because the petitioner had 
additional deductions, adjustments, or other items shown on its Schedule K for all relevant years, the 
petitioner's net income is found on Schedules K of its tax returns. 
4 
According to Barron 's Dictionary of Accounting Terms 11 7 (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 1 18. 
Page 6 
The petitioner's net current assets during 2001 were $3,841. 
Therefore, for the year 2001, the petitioner did not have sufficient net current assets to pay the proffered 
wage. 
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 proffered wage as 
of the priority date through an examination of wages paid to the beneficiary, or its net income or net current 
assets. 
Counsel asserts on appeal that a management fee paid to another corporation wholly owned by its principal 
shareholder could be used to bolster the petitioner's net income in 2001. Counsel submits a letter from the 
petitioner's accountant that describes a management fee of $45,000 paid by the 
corporation, owned by . It is noted that the tax return submitted for 
on appeal does not support counsel's assertion that this entity is owned 
Form 1055 of this return indicates that 
 is 60 percent partner, with two other partners holding twenty 
percent interest each in the company. 
The AAO notes that this management fee is included on the petitioner's description of "Other Deductions" in 
its 2001 tax return; however, the record is not clear as to why counsel would consider the management fee as 
a source of additional funds with which to pay the entire proffered wage. The petitioner's 2002 and 2003 tax 
returns also include a management fee under "other deductions," at the same time they indicate sufficient net 
income to pay the entire proffered fee. Furthermore, the management fee is an expense that had already been 
paid, and cannot be utilized to show additional bds available to pay the entire proffered wage. Finally, counsel 
appears to suggest that the financial resources of another entity partially owned by the petitioner's principal 
shareholder can be used to establish the petitioner's ability 
 in 2001. However, the 
record based on the tax retwns for both the petitioner and for 
 identify two individuals 
with the same surname, different first names, and living at different addresses. Thus, the record does not establish 
that the petitioner's primary shareholder and the primary partner in are one and the 
same person. More importantly, contrary to counsel's assertion, CIS may not "pierce the corporate veil" and 
look to the assets of the corporation's owner to satisfy the corporation's ability to pay the proffered wage. It 
is an elementary rule that a corporation is a separate and distinct legal entity fi-om its owners and shareholders. 
See Matter of M, 8 I&N Dec. 24 (BIA 1958)' Matter of Aphrodite Investments, Ltd., 17 I&N Dec. 530 
(Comrn. 1980), and Matter of Tessel, 17 I&N Dec. 63 1 (Act. Assoc. Comm. 1980). Consequently, assets of 
its shareholders or of other enterprises cannot be considered in determining the petitioning corporation's 
ability to pay the proffered wage. 
Counsel's assertions on appeal cannot be concluded to outweigh the evidence presented in the tax returns as 
submitted by the petitioner that demonstrates that the petitioner could not pay the proffered wage fkom the day 
the Form ETA 750 was accepted for processing by the Department of Labor. 
As stated previously, the AAO may also examine the totality of the petitioner's circumstances in petitions in 
which the petitioner has had an uncharacteristically unprofitable year. Matter of Sonegawa, 12 I&N Dec. 612 
(BIA 1967)' relates to petitions filed during uncharacteristically unprofitable or difficult years but only in a 
framework of profitable or successfU1 years. The petitioning entity in Sonegawa had been in business for over 
1 1 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 thls case to parallel those in Sonegawa, nor has it been 
established that 2001 was an uncharacteristically unprofitable year for the petitioner. The AAO does note that 
the record indicates the petitioner has been in business since 1992; however, the record contains no further 
documentation to establish the petitioner's business longevity, reputation in the industry, provision of unique 
services, or any other relevant factors in 2001 that would affect the petitioner's overall circumstances. Thus, 
the AAO does not find sufficient evidence in the record that would establish circumstances analogous to those 
faced by the petitioner in Sonegawa. 
Therefore, the evidence submitted does not establish that the petitioner had the continuing ability to pay the 
proffered wage beginning on the priority date. Thus, the AAO affirms the director's November 4, 2005 
decision to deny the petition. 
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.