dismissed EB-3 Case: Construction

MATTER OF Y-D-, LLC 
APPEAL OF TEXAS SERVICE CENTER DECISION 
Non-Precedent Decision of the 
Administrative Appeals Office 
DATE: APR. 25,2017 
PETITION: FORM I-140, IMMIGRANT PETITION FOR ALIEN WORKER 
The Petitioner, a construction and roofing business, seeks to employ the Beneficiary as a 
slate/clapboard roofer. It requests classification of the Beneficiary as a skilled worker under the third 
preference immigrant classification. See Immigration and Nationality Act (the Act) 
section 203(b)(3)(A)(i), 8 U.S.C. § 1153(b)(3)(A)(i). This employment-based immigrant classification 
allows a U.S. employer to sponsor a foreign national for lawful permanent resident status to work in a 
position that requires at least two years of training or experience. 
The Director of the Texas Service Center denied the petition, concluding that the record did not 
establish, as required, that the Petitioner has the ability to pay the proffered wage to the Beneficiary. 
On appeal, the Petitioner asserts that it has the ability to pay the proffered wage in the totality of the 
circumstances. 
Upon de novo review, we will dismiss the appeal. 
I. LAW 
Employment-based immigration generally follows a three-step process. First, an employer must 
obtain an approved labor certification from the U.S. Department of Labor (DOL).
1 
See section 
212(a)(5)(A)(i) of the Act, 8 U.S~C. § 1182(a)(5)(A)(i). By approving the labor certification, the 
DOL certifies that there are insufficient U.S. workers who are able, willing, qualified, and available 
for the offered position and that employing a foreign national in the position will not adversely affect 
the wages and working conditions of domestic workers similarly employed. See Section 
212(a)(5)(A)(i)(I)-(II) of the Act. Second, the employer may file an immigrant visa petition with 
U.S. Citizenship and Immigration Services (USCIS). See section 204 of the Act, 8 U.S.C. § 1154. 
Third, if USCIS approves the petition, the foreign national may apply for an immigrant visa abroad 
or, if eligible, adjustment of status iii the United States. See section 245 ofthe Act, 8 U.S.C. § 1255. 
1 
The date the labor certification is filed, in cases such as this one, is called the "priority date." 
Matter of Y-D-, LLC 
II. ANALYSIS 
The regulation at 8 C.F.R. § 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 either 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 in this case is December 4, 2013. The proffered wage as stated on the ETA 
Form 9089, Application for Permanent Employment Certification (labor certification), is $64,334 
per year. The record indicates the Petitioner is structured as a limited liability company (LLC) and 
filed its tax returns on IRS Form 1065, U.S. Return of Partnership Income.2 
In evaluating a petitioner's ability to pay the proffered wage, USCIS requires the petitioner to 
demonstrate financial resources sufficient to pay the beneficiary's proffered wage, 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'l Comm'r 1967). 
In determining the petitioner's ability to pay the proffered wage during a given period, USCIS 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 proof of the petitioner's ability to 
pay the proffered wage. In this case, the Petitioner has not employed the Beneficiary. 
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, USCIS will next examine the net income figure reflected 
on the petitioner's federal income tax return, without consideration of depreciation or other 
expenses. River Street Donuts, LLC v. Napolitano, 558 F.3d 111 (1st Cir. 2009); Taco Especial v. 
2 An LLC is an entity formed under state law by filing articles of organization. An LLC may be classified for federal 
income tax purposes as if it were a sole proprietorship, a partnership, or a corporation. If the LLC has only one owner, it 
will automatically be treated as a sole proprietorship unless an election is made to be treated as a corporation. If the LLC 
has two or more owners, it will automatically be considered to be a partnership unless an election is made to be treated as 
a corporation. If the LLC does not elect its classification, a default classification of partnership (multi-member LLC) or 
disregarded entity (taxed as if it were a sole proprietorship) will apply. See 26 C.F.R. § 301.7701-3. The election 
referred to is made using IRS Form 8832, Entity Classification Election. In this case, the Petitioner, a multi-member 
LLC, is considered to be a partnership for federal tax purposes. 
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Matter ofY-D-, LLC 
Napolitano, 696 F. Supp. 2d 873 (E.D. Mich. 2010), aff'd, No. 10-1517 (6th Cir. filed Nov. 10, 
2011).3 
The Petitioner's tax returns state its net income as follows: 
• In 2013, the Petitioner's IRS Form 1065 stated net income of$49,103. 4 
• In 2014, the Petitioner's IRS Form 1065 stated net income of $40,331. 
• In 2015, the Petitioner's IRS Form 1065 stated net income of$79,292. 
Therefore, for the years 2013 and 2014, the Petitioner did not establish that it had sufficient net 
income to pay the proffered wage. 
If the petitioner's net income does not equal the amount of the proffered wage or more, USCIS will 
review the petitioner's net current assets. Net current assets are the difference between the 
petitioner's current assets and current liabilities.5 A partnership's year-end current assets are shown 
on Schedule L, lines 1 (d) through 6( d) and include cash-on-hand, inventories, and receivables 
expected to be converted to cash within one year. Its year-end current liabilities are shown on lines 
15(d) through 17(d). If the total of a partnership's end-of-year net current assets 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 tax returns stated its net current assets as follows: 
• In 2013, the Petitioner's IRS Form 1065 stated net current assets of$66,867. 
• In 2014, the Petitioner's IRS Form 1065 stated net current assets of$7,795. 
• In 2015, the Petitioner's IRS Form 1 065 stated net current assets of $4 7, 151. 
3 In Matter of K.C.P. Food, 623 F. Supp. at 1084, the court held that the Immigration and Naturalization Service, now 
USCIS, 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. See Taco Especial v. Napolitano, 696 F. 
Supp. 2d at 881 (gross profits overstate an employer's ability to pay because it ignores other necessary expenses). 
4 For an LLCtaxed as a partnership, where the petitioner's income is exclusively from a trade or business, USCIS considers 
net income to be the figure shown on Line 22 ofpage one ofthe petitioner's IRS Form 1065, U.S. Return of Partnership 
Income. However, where the petitioner 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 or additional 
credits, deductions or other adjustments, net income is found on page 5 (2012-2015) of IRS Form 1065 at line I of the 
Analysis of Net Income (Loss) of Schedule K. See Instructions for Form I 065, at http://www.irs.gov/pub/irs­
pdf/i1065.pdf(last visited Apr. 6, 2017) (indicating that Schedule K is a summary schedule of all owners' shares ofthe 
entity's income, deductions, credits, etc.). In this case, the Petitioner's Schedule K for 2014 and 2015 have relevant entries 
for additional deductions and, therefore, its net income is found on line I of the Analysis ofNet Income (Loss) of Schedule K 
of its tax returns for these years. 
5 According to Barron's Dictionary of Accounting Terms 117 (3d 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). /d. at 118. 
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Matter ofY-D-, LLC 
Therefore, for 2013 and 2014, the years at issue, the record reflects that Petitioner had sufficient net 
current assets to pay the proffered wage for 2013 but not 2014. 
Thus, from the priority date onward, the Petitioner has not established that it has the continuing 
ability to pay the Beneficiary's proffered wage through an examination of the Petitioner's net 
income or net current assets. 
On appeal, counsel asserts that it has the ability to pay the Beneficiary's proffered wage in the 
totality of the circumstances. USCIS may consider the overall magnitude of the petitioner's business 
activities in its determination of the petitioner's ability to pay the proffered wage. See Matter of 
Sonegawa, 12 I&N Dec. 612. As in Sonegawa, USCIS may, at its discretion, consider evidence 
relevant to the petitioner's financial ability that falls outside of a petitioner's net income and net 
current assets. Accordingly, USCIS may consider such factors as the number of years 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 USCIS deems relevant to the petitioner's ability to 
pay the proffered wage. · 
Here, the Petitioner's tax returns for 2012 through 2015 provide the following details: 
Year Net Net Current Gross Cost of Gross Profit 
Income Assets Receipts Goods Sold 
20126 $94,758
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$81,499 $887,232 $624,517 $262,715 
2013 $49,103 $66,867 $978,242 $768,601 $768,601 
2014 $40,331 $7,795 $1,167,099 $1,021,989 $145,110 
2015 $79,292 $47,151 $2,424,559 $1,995,773 $428,786 
In this case, we note that the Petitioner has had consistent growth in its gross receipts and gross 
profit from 2012 through 2015. However, the Petitioner's net income decreased significantly from 
2012 through 2014 and its net current assets have decreased from 2012 through 2015. We note that 
the Petitioner's cost of goods sold for 2014 were higher than previous years in relation to its gross 
receipts. The record does not establish that the Petitioner incurred any unexpected expenses in that 
year. The Petitioner cites a letter from "its accountant who states the Petitioner has been growing 
rapidly since it was established in February 20108 and has been making additional investments into 
new equipment and other capital expenditures. However, the record does not contain documentation 
6 This precedes the priority date and is only considered here in the totality of the circumstances. 
7 
The net income on the Petitioner's 2012 tax return is found on page 5 of the Form I 065 as part of Schedule K due to 
additional income and deductions for that year. 
8 We note that the Petitioner's tax returns state the business started on January I, 20 I 0, the Form 1-140, Immigrant 
Petition for Alien Worker, states that the.business was established on April 3, :2009, and the labor certification states that 
the business commenced in 2007. The Petitioner must resolve these discrepancies in any further filings. 
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Matter ofY-D-, LLC 
to substantiate these investments in new equipment or the capital expenditures. The Petitioner's 
accountant also states that in 2014, the Petitioner could have used $40,457 that was paid to one of its 
owners as "guaranteed payments to partners," as indicated on Line 10 of its tax return, toward the 
Beneficiary's proffered wage. The record does not contain any evidence to support the assertion that 
this owner was willing to forego this guaranteed payment and had the financial ability to do so. 
Moreover, the Petitioner has submitted two different versions of its 2014 tax returns. The first, 
submitted with the initial petition, reflects no guaranteed payment to partners, while the second, 
submitted in response to a request for evidence, states $40,457 in guaranteed payments to partners. 
The Petitioner now seeks to rely on the second version of its tax return, which included guaranteed 
payments to partners, to establish its ability to pay. The Petitioner has not explained why it 
submitted two different versions of its 2014 tax return, nor has it provided independent, objective 
evidence pointing to where the truth lies. See Matter of Ho, 19 I&N Dec. 582, 591-92 (BIA 1988). 
Absent such explanation and documentation, the Petitioner may not rely on its claimed payments to 
partners to establish its ability to pay in 2014. 
For the reasons discussed, we conclude that the Petitioner has not established its ability to pay the 
proffered wage in the totality of the circumstances. 
III. CONCLUSION 
The Petitioner has not established its continuing ability to pay the proffered wage from the priority 
date onward. 
ORDER: The appeal is dismissed. 
Cite ·as Matter ofY-D-, LLC, ID# 399574 (AAO Apr. 25, 2017) 
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