dismissed EB-3 Case: Construction

. . 
 U.S. Department of Homeland Security 
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 20 Mass. Ave., N.W., Rm. A3000 
Wash~naon. DC 20529 
PUBUC COPY 
FILE: Office: VERMONT SERVICE CENTER 
EAC 03 195 50340 
IN RE: 
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. 9 1 153(b)(3) 
ON BEHALF OF PETITIONER: 
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 
Page 2 
DISCUSSION: The service center director denied the employment-based visa petition, and the matter is now 
before the Administrative Appeals Office (AAO) on appeal. The appeal will be dismissed. 
The petitioner is a residential and industrial floor~construction company. It seeks to employ the beneficiary 
permanently in the United States as an industrial designer. As requifed 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, which is listed on the ETA 750 as three corporations, 
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. 
On appeal, counsel states that the petitioner does have the ability to pay the proffered wage. Counsel submits 
no further documentation. 
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 Immigration and Nationality Act (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. 
i 
  he 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 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, the day the Form ETA 750 was accepted for processing by any office within the employment system of 
the Department of Labor. See 8 CFR 4 204.5(d). Here, the Form ETA 750 was accepted for processing on 
July 22,2002. The proffered wage as stated on the Form ETA 750 is an hourly salary of $22.14 for a 40 hour 
workweek, or an annual salary of $46,051.20. On the Form ETA 750B, signed by the beneficiary, the 
beneficiary did not claim to have worked for the petitioner. 
On the petition, the petitioner claimed to have been established in 1995, to have five employees, a gross 
annual income of $500,000 and a net annual income of $30,000. The petitioner submitted no further 
documentation on the petitioner's ability to pay the proffered wage or the beneficiary's qualifications for the 
proffered position. 
Page 3 
Because the director deemed the evidence submitted insufficient to demonstrate the petitioner's continuing 
ability to pay the proffered wage beginning on the priority date, or the beneficiary's qualifications, on July 28, 
2003, the director requested additional evidence. The director specifically requested that the petitioner 
provide additional evidence of its ability to pay the proffered weekly wage of $885.60 as of July 22, 02002, 
the priority date. The director stated that the petitioner could submit any of the following types of evidence: 
The petitioner's 2002 Federal income tax return, with all schedules and attachments; copies of the 
beneficiary's W-2 forms if the petitioner had employed him; a statement from a financial officer of the 
company if the petitioner had 100 or more workers; or the petitioner's annual report for 2002, accompanied 
by audited or reviewed financial statements. The director stated that additional evidence such as accredited 
profit/loss statements, bank account records, or personnel records might be considered but only as 
supplementary evidence to establish the petitioner's ability to pay. The director also noted that no evidence of 
the beneficiary's prior work experience was found in the record, and requested that the petitioner submit 
additional documentation to establish that the beneficiary possessed the required two years of job related 
experience as of July 22, 2002. The director stated that such evidence should be in the form of a letter from a 
current or former employer and should include the name, address, and title of the writer and a specific 
description of the duties performed by the beneficiary or of the training received. If such evidence was shown 
to be unavailable, the director stated that other documentation would be considered. 
In response, counsel submitted IRS Form 1120s for, for the tax year 2001, as well as a W-3 Form 
and bank statements forcounsel also submitted a 2001 W-3 Form that indicated J 
paid wages of $41,500 in 2001. The petitioner's Form 1120s indicated that the petitioner had an ordinary 
income of -$675 in 2001. Counsel submitted IRS Form 1120s for 
 for tax year 2002, that 
indicated a net income of -$16. Counsel also submitted Mellon Bank PSFS account statements for the 
petitioner (identified as, Pennsylvania) for November and October 2001. With regard 
to tax year 2002, counsel submitted a Form 1120s for that indicated the petitioner had ordinary 
income of -$I6 in 2002. In addition, the petitioner submitted a W-3 statement for for 2002 that 
indicated the etitioner paid $19,002 in wages. The petitioner also submitted Mellon Bank PSFS statements 
for dfor two different bank accounts for May, and August 2002. These two accounts are -, 
and  he petitioner also submitted a bank statement for a third account, , for June 2002. 
Counsel also submitted bank statements for J., for new accounts with Citizens Bank Acct: - 
and, as of August 2002.~ 
With regard to the other corporations identified on the ETA 750 as businesses the petitioner was doing 
- - 
business as, counsel submitted a 2002 Form 
 Langhorne, 
~enns~lvania.~ This document indicated an ordinary income of $4,020 during 2002. Counsel also submitted 
bank statements from Commerce Bank for the second company listed as the petitioner, namely, m 
for the months May, June, and July 2003. In addition, counsel submitted a Mellon PSFS bank 
The federal employer identification number for is noted as - 
2 
 Based on documentation in the record, the petitioner appears to have transferred his accounts from Mellon 
Bank to Citizens Bank in Aumst 2002. 
The federal employer idkrtification number for Barefoot Floors, Inc. is noted on the Form 1120s as 
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Page 4 
statement for ,dated May 2002 
(account number - and a W-3 Form for tax year 2002 that indicated t- 
paid $23,083 in wages that year. 
Counsel also submitted a letter from 
 dated October 10, 2003, in which Mr. 
 identified 
himself as the petitioner's owner. In this letter, Mr. stated that as of April 20, 2001, he had over 
$38,438 in his bank account that was available as of April 20, 2001 to pay the beneficiary's salary. Mr. 
stated that by filing his letter, he was assuming personal responsibility for the payment of the 
beneficiary's salary. Counsel also submitted a letter written by, Financial Center Manager, 
Wachovia Bank, Rosemont, Pennsylvania. This letter stated that Mr. ad an account with Wachovia 
Bank since 2000, and that the available balance in his account as of April 20,2001 was $53,790, and that as of 
September 9, 2003, the available balance was $60,137. The final document submitted by counsel is a letter 
dated January 21, 2002 and written by, General Director, Consan. In his letter. Mr. stated 
that the beneficiary had worked as a floor specialist, 4" Category for a joint stock company from February 6, 
1995 to May 29,l 99K4 
In his cover letter, counsel stated that despite a net income in 2001 of -$675, the petitioner had over $49,000 
invested in 2001 as a loan from shareholders, and this money was available to pay the beneficiary's salary. In 
addition, counsel stated that the $41,500 paid to the petitioner's officer was also available to pay the 
beneficiary's salary. Counsel also stated that the 2001 bank statements indicated that over 
$1 7,000 was available monthly on the average which was in excess of the beneficiary's proffered monthly 
salary of $3,203.16. Therefore, counsel stated the petitioner established its ability to pay the beneficiary's 
proffered wage as of 2001. 
Counsel further stated that in 2002, the petitioner continued doing business as - and as 
. Counsel stated that despite having only $4,000 in net income in 2002, the companies 
still demonstrated their ability to pay the beneficiary's weekly salary of $885.60 per week. Counsel stated that 
cash available at the end of 2002 at was $24,173, while cash available at at the end 
of 2002 was over $3,559. Counsel noted that this combined available cash meant $31,500 was available to 
pay the beneficiary salary at the end of 2002. Counsel also noted that the company officers continued to 
perform the duties to be delegated to the beneficiary, and were compensated at the rate of $23,000 a year at 
Barefoot Floors and $19,000 at Counsel notes that these wages made another $42,000 available to 
pay the beneficiary's salary. Counsel also noted that the companies' 2002 bank statements confirmed that the 
petitioner's available balance was well in excess of the beneficiary's proffered weekly salary of $885. 
Counsel concluded that the petitioner's personal funds, the petitioner's bank statements of the petitioner, and 
the W-3 forms that document wages paid all establish the petitioner's ability to pay the proffered wage. 
Counsel stated that in response to the director's request for documentation that the beneficiary had the 
requisite two years of work experience as a sales manager, it submitted the letter from his previous employer 
in Moldova. 
Although the translated version of the employment verification letter does not indicate it, the original letter 
indicated the beneficiary's previous employer was located in Chisinau, Moldova. 
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Page 5 
On December 1, 2003, the director issued a second request for further evidence. In his request, the director 
stated that further review of the evidence showed that is the petitioner according to the Department 
of Labor, and that the evidence submitted previously did not establish the ability of 1, to pay the 
proffered wage. The director requested that the petitioner submit -002 Federal income tax return 
with all schedules and attachments. The director further stated that if the beneficiary had ever been employed 
By SDS, Inc., to submit the beneficiary's W-2 forms. The director also stated that the petitioner could submit 
annual reports for 2002 accompanied by audited or reviewed financial statements, and noted that a 
corporation is a separate and distinct legal entity from its owners or stockholders. The director stated that 
consequently, any assets of it shareholder or of other enterprises or corporations cannot be considered in 
determining the petitioner's corporation's ability to pay the proffered wage. 
In response, counsel submitted a 2002 Form 1120s for - that reflected a net income of 
$4,020. This document indicates a federal employer identification number (EIN) of 23-2845673. Counsel also 
submitted a form generated by the Pennsylvania Department of State Corporation Bureau and dated as 
received by the Pennsylvania office on September 27, 2002. The document is entitled "Articles of 
Amendment-Domestic Corporation." In the document, Softwarel at - 
Pennsylvania indicates that it wishes to change its name to 
 The 
document further indicates that the amendment was adopted by shareholders or members. The document is 
signed by -' and dated September 23, 2002. Counsel also submitted an IRS notification of 
change of address for dated July 1, 1996 for - The change of address is from 
-, Philadelphia, Pennsylvania to - Yardley, Pennsylvania. The 
IRS document identifies Software Design Services' taxpayer identification number as 23-2845673. Counsel 
also submitted a new letter from Mr. undated, that stated he had over $50,000 in personal funds that 
he was willing to use to pay the beneficiary's salary. Counsel resubmitted Mr. letter that 
affirmed the petitioner's owner's balance of $53,790 as of April 20, 2001. 
Counsel stated that in 2002, the petitioner had sufficient ability to pay the beneficiary's proffered wage of 
$46,05 1.20, based on its available cash of $24,173, loans from shareholder of $1 9,242, and retained earnings 
of $4,02O,that combined totaled $51,455. Counsel also referenced the state of Pennsylvania Department of 
State document and stated that this confirmed that is actually doing business as - 
tated that 
 did not file a separate tax return. 
On April 16, 2004, the director denied the petition. The director stated the petitioner offered the beneficiary a 
salary of $885.60, for an annual salary of $46,051.20. The director stated that the ETA 750 listed the three 
corporations as the petitioner, and stated that the financial assets for all three corporations could not be 
considered when determining the petitioner's ability to pay the proffered page. The director stated that a 
corporation is a separate and distinct legal entity from its shareholders, and that any assets of its shareholders 
or other enterprises or corporation could not be considered in determining the petitioning corporation's ability 
to pay the proffered wage. The director then considered the ability of each corporation listed on the labor 
certification to individually pay the proffered wage. 
and 
 appear to be the same person. 
Page 6 
With regard to 
 the director stated the 2001 tax return showed a net loss of $675 and current 
assets of $4,650 over current liabilities, while the 2002 tax return showed a net loss of $16 and current net 
assets of $6,400. With regard to the bank statements submitted for the director stated that the 
statements did not meet one of two criteria for such evidence. The director described the two criteria as either 
the petitioner's year-end balances were greater to or equal to the amount of the proffered wage, or the 
petitioner's monthly bank statement had to increase incrementally with the amount of hnds necessary to meet 
the proffered monthly wage. Finally the director examined the W-3 forms submitted for for 
2001 and 2001. while the-director identified the wages paid out by 
 during these two years, 
he made no further comment as to the weight to give these documents in evaluating 
 ability 
to pay the proffered wage. 
With regard to the second company listed on the ETA 750, namely -,he director stated 
that the bank statements for May, July, and August did not meet either of the criteria addressed in the 
director's examination of- bank statements. The director identified the net income and 
current assets of the company for 2002 as $4,020 and $23,362. Although the director did not specifically 
determine whether the corporation's net income or net current assets were sufficient to pay the proffered wage 
of $38,848, he did determine that based on the evidence submitted, did not have the 
ability to pay the proffered wage. 
With regard to ., the third company identified as the'petitioner on Form ETA 750, the director also 
determined that the bank statements submitted for this company did not establish its ability to pay the 
proffered wage. The director also examined the issue of officers' compensation being utilized to pay the 
beneficiary's salary. The director determined that the compensation of officers represented monies already 
expended by the corporation and therefore this expense could not be considered to be readily available fimds 
with which to pay the proffered wage. The director also determined that Mr. ltatement as to his 
. willingness to pay the proffered wages from his personal assets did not establish the petitioner's ability to pay 
the proffered wage as the petitioner, as, a corporation is a separate and distinct legal entity from its 
shareholders. The director reiterated that any assets of shareholder or of other enterprises or corporation could 
not be considered in determining the petitioner's ability to pay the proffered wage. 
In addition, the director noted other unresolved issues prompted by the evidence submitted to the record. 
First, the petitioner noted the petitioner submitted evidence that 
 chan ed its name to - 
The director stated further evidence was needed to establish that 
 a software design 
company, became - a flooring company. In addition, the director noted that - 
was listed as 33 per cent owner on 2001 tax return while 
 was listed as 100 
per cent owner on 2002 tax return. If, as the tax returns suggest, - was sold, the 
director stated that the petitioner had to explain how the tax returns of - could establish the 
petitioner's ability to pay. Finally the director stated that the petitioner had two 1-140 petitions pending at the 
Vermont Service Center, and that the evidence submitted to the record did not warrant the approval of either 
petition. 
On appeal, counsel states that the director requested evidence that the petitioner had the ability to pay the 
proffered salary of $885.60 per week or $46,051.20 annually as of July 22, 2002. Counsel states, that in 
reference to the financial assets of - the corporation can pay the proffered wage by 
combining cash available at the end of the year in the amount of $24,173, loans from the shareholders in the 
amount of $19,242. and retained earnings in the amount of $4,020. Based on this combination of funds, 
counsel states that at least $51,455 was available in 2002 to pay the proffered salary. Counsel also asserts that 
documentation from the Pennsylvania Department of State Corporation Bureau was submitted that confirmed 
Barefoot Floors, Inc is actually doing business as. Counsel states that did not file separate 
tax returns, and that the orrespondence for the IRS indicates its FEIN number of is the 
same number that appears on 2002 federal corporate income tax return. Counsel also 
stated that the owner of F assumed personal responsibility to use his personal funds to pay the 
beneficiary's salary if necessary, and that the owner's bank statement balances indicated that funds greater 
than the proffered wage were available to pay the wage. 
Counsel concludes the brief by stating that the combined available funds of $5 1,455 in the company assets, 
and the petitioner's owner's personal assets of over $50,000 from 2002 to 2003, clearly demonstrated the 
petitioner's ability to pay the proffered wage of $46,051 as of July 28, 2002. 
With the original petition, counsel submitted an IRS Form 1120s for 
 for tax year 2001. However, 
since the priority date for the instant petition is July 28, 2002, the petitioner's income tax return for tax year 
2001 is not dispositive as to the petitioner's ability to pay the proffered wage. However, it will be reviewed 
further in these proceedings to clarify the identity of the actual petitioner, and the relationship between = 
. and the other two companies. , , 
It is noted that based on the documentation from the Pennsylvania Department of State Corporation Bureau. 
submitted to the record, 
 changed its name to 
 Based on the employer 
identification numbers (EIN), and 
 third companies listed on 
the Form ETA 750 as businesses the petitioner was doing business as, appear to be the same company. Their 
joint EIN is However, as established by its 2001 Form 1120s and 2001 W-3 Form. 
 - 
appears to have a distinct EIN from either, or - 
is 
- 
In response to the director's request for further evidence, counsel also raised the issue of officer compensation 
and how such compensation could be viewed used as available funds to pay the beneficiary. However, 
compensation-of officers is more routinely considered a possible source of additional funds, if the record 
substantively establishes that the officer who is compensated is the sole officer or the majority shareholder, 
that varying compensation for officers is discretionary, that the compensation is not provided in lieu of wages, 
that are not discretionary, and that compensation is substantially greater than the proffered wage. 
In the instant petition, the 
 federal income tax return for 2001 indicates three owners who each 
have a 33 percent interest in the petitioner. These individuals are identified as) and 
Although the return shows $41,500 in officer compensation, no other documentation is found that 
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Page 8 
identifies the officers of the corporation and if the documented officer compensation was distributed among 
all three  shareholder^.^ In 2002, . indicated in its Form 1120s that it paid $19,002 in officer 
compensation. However, as noted below, the ownership interests in - changed in 2002, and it 
is not clear that the 2001 owners such as Mr. could declare any officer compensation provided in 
2002 as discretionary and available to pay the proffered wage. 
The director in his decision stated that the tax returns of uggested that the business had been sold. 
The Forms 1120s submitted by the petitioner for and Barefoot Floors, Inc. do indicate a 
change in the ownership interests of Mr. In 5 2001, Mr had a 33 percent stock ownership in 
. In 2002, based on the 2002 federal income tax returns submitted by the petitioner, Mr. 
established in the record. They presently appear to be two distinct corporations. If, as 
suggested by the director, was sold, this would raise the questions of whether the new corporation or 
remaining corporation was a successor-in-interest to the original petitioner, and subject to the regulatory 
criteria applied to successors-in-interest with regard to the ability to pay the proffered wage. It is also noted 
that the Department of Labor in its final determination on the ETA 750 addressed the petitioner as -. 
With regard to the use of -ersonal assets to pay the proffered wage,.the director noted that these 
funds would not be available to pay the proffered wage. The director's comment is well founded. While a sole 
proprietorship business structure does allow for the use of the owner's assets to pay the expenves of the 
business, that could include wages, the S corporation structure of the petitioner in the instant petition does not 
allow for such an action. Contrary to counsel's assertion, Citizenship and Immigration Services (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 
from 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 (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 in determining the petitioning corporation's ability to pay the proffered wage. 
In its response to the director's request for further evidence, counsel recommends the use of retained earnings 
to pay the proffered wage. 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 incomes 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 
According to this tax return, Mr. Klebanov owned 100 per cent of. in 2002. 
Page 9 
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 stated that a loan from the shareholders be considered as available additional hnds to pay the 
beneficiary's wage; however, as will be shown further in these proceedings, loans from shareholders are not 
considered as part of the petitioner's net income, after expenses are paid, and, in fact, are identified as long 
term rather than current liabilities on Schedule L of the Form 1120s. As a long-term liability, such loans 
would not be considered when calculating the petitioner's net current assets. 
Finally, both the director's and 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. 
5 204.5(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 fmancial 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. For example, counsel submitted some bank statements from 2001 for 
. and other statements from other months in 2002. Counsel also submitted bank statements for 
specific months in 2003 for another corporation under which the petitioner claims to be 
doing business. None of these statements provide further evidence of the petitioner's sustainable ability to pay 
the proffered wage. They only provide information on ending balances for several months. Third, no evidence 
was submitted to demonstrate that the funds reported on the petitioner's bank statements somehow reflect 
additional available funds that were not reflected on its tax return, such as the cash specified on Schedule L that 
would be considered in determining the petitioner's net current assets. 
Upon review of the record, without more persuasive evidence, at the time of filing, the petitioner appears to 
be -1   or purposes of examining the petitioner's net income and net current assets, the AAO will only 
consider the federal income tax returns of, in these proceedings. 
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 did not establish that it employed and paid the beneficiary the full proffered wage 
in 2001 and onward. 
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, 71 9 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), aff'd, 703 F.2d 571 (7th Cir. 1983). 
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. 
Page 10 
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 evidence indicates that the petitioner is structured as an S corporation. For an S corporation, CIS 
considers net income to be the figure shown on line 21, ordinary income, of the IRS Form 1120s. The 
petitioner submitted income tax returns for - for tax years 2001 and 2002. Since the priority date 
year for the instant petition is 2002, the AAO does not view the petitioner's tax information for 2001 to be 
dispositive in these proceedings. Therefore the AAO will only examine the petitioner's 2002 income tax 
return. The petitioner's tax return for 2002 shows the following amount of ordinary income: -$16. This figure 
is not sufficient to pay the proffered wage. 
Nevertheless, the petitioner's net income is not the only statistic that can be used to demonstrate a petitioner's 
ability to pay a proffered wage. 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. 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 liabilities.' 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 a corporation'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 out of those net 
current assets. The petitioner submitted the following information for tax year 2002: 
Ordinary Income $ -16 
Current Assets $ 6,400 
Current Liabilities '$ 0 
Net current assets $ 6,400 
These figures fail to establish the ability of the petitioner to pay the proffered wage. The petitioner has not 
demonstrated that it paid the full proffered wage to the beneficiary. In 2002, the petitioner shows a net income 
of -$16, and net current assets of $6,400, and has not, therefore, demonstrated the ability to pay the proffered 
7 
 According to Barron S Dictionary of Accounting Terms 117 (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 .118. 
wage of $38,438.40 out of its net income or net current assets. The petitioner has not demonstrated that it paid 
the full proffered wage to the beneficiary in 2003, nor has it submitted its 2003 federal income tax return to 
the record for further consideration of the petitioner's net income or net current assets in 2003. Therefore the 
petitioner cannot demonstrate its ability to pay the proffered wage of $38,438.40 out of its net income or net 
current assets in 2003. As noted previously, the assets of the shareholders, loans from shareholders, retained 
earnings, bank balances for any of the three corporations named on the Form ETA 750, assets of other 
corporations, or the personal assets of an individual who as of 2002 has no ownership interest in the 
petitioner, are not viewed as corporate assets. Therefore, the petitioner has not demonstrated that any other 
funds were available to pay the proffered wage. The petitioner has not, therefore, shown the ability to pay the 
proffered wage during the salient portion of 2002 and continuing to the present date. 
The petition will be denied for the above stated reasons, with each considered as an independent and 
alternative basis for denial. In visa petition proceedings, the burden of proving eligibility for the benefit 
sought remains entirely with the petitioner. Section 291 of the Act, 8 U.S.C. 8 1361. Here, that burden has 
not been met. 
ORDER: The appeal is dismissed.