dismissed EB-3 Case: Civil Engineering

identifying data deleted to 
prevent dearly unwarranted 
invasion of persunal privacy 
PUBLIC COPY 
U.S. Department of Homeland Security 
20 Mass. Ave., N.W.. Rm. A3042 
Washington, DC 20529 
U.S. Citizenship 
and Immigration 
Services f% 
FILE: WAC-03-267-5491 0 Office: CALIFORNIA SERVICE CENTER 
 Date: 1 9 2006 
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. $ 1 1 53(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. 
~6be1-t P. Wiemann, Chief 
Administrative Appeals Office 
WAC-03-267-5491 0 
Page 2 
DISCUSSION: The preference visa petition was denied by the Director, California Service Center, and is 
now before the Administrative Appeals Office (AAO) on appeal. The appeal will be dismissed. 
The petitioner is an architectural design and consulting firm. It seeks to employ the beneficiary permanently 
in the United States as a civil engineer. 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 beginning on the priority date of the visa petition. 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 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. 
As set forth in the director's November 12, 2004 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. Section 203(b)(3)(A)(ii) of the Act, 8 
U.S.C. # 1153(b)(3)(A)(ii), provides for the granting of preference classification to qualified 
immigrants who hold baccalaureate degrees and are members of the professions. 
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 Form ETA 750 was accepted on October 26, 2001. The proffered wage as stated on the Form ETA 
750 is $30.05 per hour ($62,504.00 per year). The Form ETA 750 states that the position requires two years 
WAC-03-267-5491 0 
Page 3 
of experience in the proffered position or in a civil engineering related field and a bachelor's degree or its 
foreign equivalent in civil engineering. 
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 
1 
pertinent evidence in the record, including any new evidence properly submitted upon appeal . Counsel does 
not submit any new evidence on appeal. Relevant evidence in the record includes the petitioner's corporate 
federal tax returns for 2000 through 2003, the petitioner's bank account statements, the petitioner's owner's 
bank statements, real property tax bills reflecting the value of the petitioner's owner's real estate properties, 
and W-2 forms issued by other companies to the beneficiary. 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 a personal services 
corporation. On the petition, the petitioner claimed to have been established in 1992~, to have a gross annual 
income of over $600,000, and to currently employ seven workers. According to the tax returns in the record, 
the petitioner's fiscal year is based on a calendar year. On the Form ETA 750B, signed by the beneficiary on 
October 3,2001, the beneficiary did not claim to have worked for the petitioner. 
On appeal, counsel asserts that the regulation governing ability to pay is an ultra vires requirement because 
the regulation was promulgated in 1991 "without disclosing the authority under which it was doing so, and 
without providing any explanation of why that requirement was being imposed." In the alternative, counsel 
argues that the director ignored the evidence of the petitioner's real estate holdings and the totality of 
circumstances reflected in the evidence already submitted into the record of proceeding that reflects that the 
petitioner can pay the proffered wage and cites to Matter of Sonegawa, 12 I&N Dec. 61 2 (BIA 1967). 
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, 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 ofSonegawa, 12 I&N Dec. 612 (Reg. Comm. 1967). CIS'S authority to evaluate petitioning entities7 
continuing ability to pay proffered wages beginning on the priority date has been upheld in federal court. Those 
cases are cited below among the discussion pertaining to this case. Thus, counsel's assertion that CIS is without 
authority to examine petitioning entities7 continuing ability to pay the proffered wage beginning on the priority 
date is unfounded. 
I 
 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 
ofSoriano, 19 I&N Dec. 764 (BIA 1988). 
Counsel on appeal states that its incorporation date is 1996, which is also reflected on the petitioner's 
corporate tax returns. 
WAC-03-267-5491 0 
Page 4 
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, the petitioner has not established that it employed and paid the beneficiary the full proffered 
wage from the priority date in 2001 onwards. 
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 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. 111. 1982)' aff'd, 703 F.2d 571 (7th Cir. 1983). 
Reliance on the petitioner's gross sales and profits and wage expense is misplaced. Showing that the 
petitioner's gross sales and profits 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 tax returns demonstrate the following financial information concerning the petitioner's ability to pay the 
proffered wage of $62,504.00 per year from the priority date: 
In 200 1, the Form 1 120 stated net income3 of -$36,263. 
In 2002, the Form 1 120 stated net income of -$44,633. 
In 2003, the Form 1 120 stated net income of $2,682. 
Therefore, for the years 2001 through 2003, the petitioner did not have sufficient net income to pay the 
proffered wage. 
3 
 Taxable income before net operating loss deduction and special deductions as reported on Line 28. 
WAC-03-267-549 10 
Page 5 
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. We reject, however, counsel's idea that the petitioner's total assets should 
have been considered in the determination of the ability to pay the proffered wage, such as real estate 
holdings. 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 ~iabilities.~ 
 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 during 2001 were $3,388. 
The petitioner's net current assets during 2002 were -$3,25 1. 
The petitioner's net current assets during 2003 were -$2,634. 
Therefore, for the years 2001 through 2003, 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's reliance on the balances in the petitioner's bank accounts is misplaced. First, bank statements are 
not among the three types of evidence, enumerated in 8 C.F.R. 9 204.5(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. 5 204.5(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 demonstrate that the hnds 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 were considered in determining the 
petitioner's net current assets. 
Finally, if the petitioner does not have sufficient net income or net current assets to pay the proffered salary, 
CIS may consider the overall magnitude of the entity's business activities. Even when the petitioner shows 
4 
According to Barron 's Dictionary of Accounting Terms 1 17 (31d 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. 
WAC-03-267-5491 0 
Page 6 
insufficient net income or net current assets, CIS may consider the totality of the circumstances concerning a 
petitioner's financial performance. See Matter of Sonegmva, 12 I&N Dec. 612 (Reg. Comm. 1967). In Matter 
of Sonegawa, the Regional Commissioner considered an immigrant visa petition which had been filed by a 
small "custom dress and boutique shop" on behalf of a clothes designer. The district director denied the 
petition after determining that the beneficiary's annual wage of $6,240 was considerably in excess of the 
employer's net profit of $280 for the year of filing. On appeal, the Regional Commissioner considered an 
array of factors beyond the petitioner's simple net profit, including news articles, financial data, the 
petitioner's reputation and clientele, the number of employees, future business plans, and explanations of the 
petitioner's temporary financial difficulties. Despite the petitioner's obviously inadequate net income, the 
Regional Commissioner looked beyond the petitioner's uncharacteristic business loss and found that the 
petitioner's expectations of continued business growth and increasing profits were reasonable. Id. at 615. 
Based on an evaluation of the totality of the petitioner's circumstances, the Regional Commissioner 
determined that the petitioner had established the ability to pay the beneficiary the stipulated wages. 
As in Matter of Sonegawa, the CIS may, at its discretion, consider evidence relevant to a petitioner's financial 
ability that falls outside of a petitioner's net income and net current assets. CIS may consider such factors as 
the number of years that the petitioner has been doing business, the established historical growth of the 
petitioner's business, the overall number of employees, the occurrence of any uncharacteristic business 
expenditures or losses, the petitioner's reputation within its industry, whether the beneficiary is replacing a 
former employee or an outsourced service, or any other evidence that CIS deems to be relevant to the 
petitioner's ability to pay the proffered wage. 
In the present matter, the petitioner has identified itself on IRS Form 1120 as a "personal service corporation." 
Pursuant to Matter of Sonegawa, supra, the AAO notes that the petitioner's "personal service corporation" status 
is a relevant factor to be considered in determining its ability to pay despite counsel not setting forth this 
argument. A "personal service corporation" is a corporation where the "employee-owners" are engaged in the 
performance of personal services. The lnternal Revenue Code (IRC) defines "personal services" as services 
performed in the fields of health, law, engineering, architecture, accounting, actuarial science, performing 
arts, and consulting. 26 U.S.C. tj 448(d)(2). As a corporation, the personal service corporation files an IRS 
Form 1120 and pays tax on its profits as a corporate entity. However, under the IRC, a qualified personal 
service corporation is not allowed to use the graduated tax rates for other C-corporations. Instead, the flat tax 
rate is the highest marginal rate, which is currently 35 percent. 26 U.S.C. 5 1 l(b)(2). Because of the high 
35% flat tax on the corporation's taxable income, personal service corporations generally try to distribute all 
profits in the form of wages to the employee-shareholders. In turn, the employee-shareholders pay personal 
taxes on their wages and thereby avoid double taxation. This in effect can reduce the negative impact of the 
flat 35% tax rate. Upon consideration, because the tax code holds personal service corporations to the highest 
corporate tax rate to encourage the distribution of corporate income to the employee-owners and because the 
owners have the flexibility to adjust their income on an annual basis, the AAO will recognize the petitioner's 
personal service corporation status as a relevant factor to be considered in determining its ability to pay. 
The documentation presented here indicates that holds 100 percent of his 
company's stock and performs the persona 
 e firm. According to the petitioner's IRS Forms 
1 120 Schedule E (Compensation of Officers 
 lected to pay himself $45,000 in 2001, $0 in 2002, 
and $13,000 in 2003. We note here that the compensation received by the company's owner during these 
years was not a fixed salary 
CIS (legacy INS) has long held that it 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 
WAC-03-267-549 10 
Page 7 
a corporation is a separate and distinct legal entity from its owners and shareholders. See Matter of M, 8 I&N 
Dec. 24 (BIA 1958), Matter ofAphrodite Investments, Ltd, 17 I&N Dec. 530 (Comm. 1980), and Matter of 
Tessel, 17 I&N Dec. 631 (Act. Assoc. Comm. 1980). Consequently, assets of its shareholders or of other 
enterprises or corporations cannot be considered i the petitioning corporation's ability to pay the 
proffered wage. Thus, the AAO will not consider personal bank account or real estate holdings 
as evidence of the petitioner's continuing ability ffered wage beginning on the priority date. In 
any event, obtaining a loan based on the value o real estate to pay the proffered wage does not 
bolster an argument in favor of the petition since this would create an additional debt obligation. 
In the present case, CIS would not be examining the personal assets o 
 but, rather, the financial 
flexibility that he as the sole owner has in setting his salary based on 
 y of his personal service 
corporation architectural firm. A review of thepetitionerys amount of general wagis paid to its employees 
was $131,741 in 2001, $149,372 in 2002, and $91,839 in 2003. 
 Within an historical perspective, the 
petitioner's 2000 fiscal year also reflects $66,500 in owner compensation, $70,112 in general wages paid to 
its employees, and $31,872 as it net income and negative net current assets. There is no evidence that m 
-auld be willing or able to forego his officer's compensation in order to pay the proffered wage. 
Additionally, the petitioner's general employees' wages are similar to the proffered wage and cast doubt upon 
the realistic nature of this job offer. 
Accordingly, after a review of the petitioner's federal tax returns and all other relevant evidence, we conclude 
that the petitioner has established that it had the ability to pay the salary offered as of the priority date of the 
petition and continuing to present. 
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 from the day 
the Form ETA 750 was accepted for processing by 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. 
5 1361. The petitioner has not met that burden. 
ORDER: The appeal is dismissed.