dismissed EB-3 Case: Culinary

to 
+mvemt clearly unwarmnted 
iravwian of 1 privacy 
U.S. Department of Homeland Security 
20 Mass. Ave., N.W., Rrn. A3000 
Washington, DC 20529 
U.S. Citizenship 
and Immigration 
Services 
FILE: Office: VERMONT SERVICE CENTER Date: 1 9 2006 
EAC 03 223 5 1271 
PETITION: 
 Immigrant Petition for Alien Worker as a Skilled Worker or Professional Pursuant to 
Section 203(b) of the Immigration and Nationality Act, 8 U.S.C. $ 1153(b) 
ON BEHALF OF PETITIONER: 
INSTRUCTIONS: 
' ~hik is the decision of the Administrative Appeals Office in your case. All documents have been returned to 
the office that originally decided your case. Any further inquiry must be made to that office. 
Robert P. Wiemann, Chief 
Administrative Appeals Office 
Page 2 
DISCUSSION: The preference visa petition was denied by the Director, Vermont Service Center, and is 
now before the Administrative Appeals Office (AAO) on appeal. The appeal will be dismissed. 
The petitioner is a restaurant. It seeks to employ the beneficiary permanently in the United States as a 
cheflcook. As required by statute, a Form ETA 750, Application for Alien Employment Certification 
approved by the Department of Labor, accompanied the petition. The director determined that the petitioner 
had not established that it had the continuing ability to pay the beneficiary the proffered wage beginning on 
the priority date of the visa petition. 
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 this decision. Further 
elaboration of the procedural history will be made only as necessary. 
As set forth in the director's original January 22,2004 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 Act, 8 U.S.C. 5 1153(b)(3)(A)(i), provides for the granting of preference 
classification to qualified immigrants who are capable, at the time of petitioning for classification under this 
paragraph, of performing slulled labor (requiring at least two years training or experience), not of a temporary 
 I 
or seasonal nature, for which qualified workers are not available in the United States. 
The regulation at 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 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. In a case where the prospective United States employer employs 100 or more 
j 
workers, the director may accept a statement fiom a financial officer of the organization 
which establishes the prospective employer's ability to pay the proffered wage. In 
appropriate cases, additional evidence, such as profitlloss statements, bank account records, 
or personnel records, may be submitted by the petitioner or requested by [Citizenship and 
Immigration Services (CIS)]. 
The petitioner must demonstrate the continuing ability to pay the proffered wage beginning on the priority 
date, which is the date the Form ETA 750 was accepted for processing by any office within the employment 
system of the Department of Labor. See 8 CFR 5 204.5(d). The priority date in the instant petition is April 
27, 2001. The proffered wage as stated on the Form ETA 750 is $11.84 per hour (35 hour week) or 
$2 1,548.80 annually. 
The MO takes a de novo look at issues raised in the denial of ths petition. See Dor v. INS, 89 1 F.2d 997, 1002 
n. 9 (2d Cir. 1989)(noting that the AAO reviews appeals on a de novo basis). The MO considers all pertinent 
Page 3 
evidence in the record, including new evidence properly submitted upon appeal1. Relevant evidence submitted on 
appeal includes counsel's brief and a copy of a Board of Alien Labor Certification Appeals (BALCA) case, 
Matter of Ranchito Coletero, 2002-INA-104 (2004 BALCA). Other Relevant evidence includes copies of the 
petitioner's 2001 and 2002 Forms 1120S, U.S. Income Tax Returns for an S Corporation, a statement from the 
petitioner's owner attesting to her personal bank balance of over $40,000, and copies of the petitioner's bank 
statements for the periods March 3 1,2001 through April 30,2001 and June 30,2003 through July 3 1,2003. The 
record does not contain any other evidence relevant to the petitioner's ability to pay the proffered wage. 
The petitioner's 2001 and 2002 Forms 1120s reflect ordinary incomes or net incomes of -$65,303, and -$90,996, 
respectively. The petitioner's 2001 and 2002 Forms 1120s also reflect net current assets of -$531,539 and 
-$411,922, respectively. 
The petitioner's bank statements reflect a beginning balance of $112,233.35 and an ending balance of 
$1 16,427.85 for the period March 3 1,200 1 through April 30,200 1. The bank statements also reflect a begming 
balance of $10 1,071.7 1 and an ending balance of $109,879.50 for the period June 30,2003 through July 3 1,2003. 
On appeal, counsel states that the petitioner has established the ability to pay the proffered wage of 
$21,548.80 based on depreciation, cash at the end of the year, capital stock, paid-in capital, loans from 
shareholders, and the owners personal bank account. 
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 lahl permanent residence. The 
petitioner's ability to pay the proffered wage is an essential element in evaluating whether a job offa is realistic. 
See Matter of Great Wall, 16 I&N Dec. 142 (Acting Reg. Comm. 1977). See also 8 C.F.R. fj 204.5(g)(2). In 
evaluating whether a job offer is realistic, CIS requires the petitioner to demonstrate financial resources sufficient 
to pay the beneficiary's proffered wages, although the totality of the circumstances affecting the petitioning 
business will be considered if the evidence warrants such consideration. See Matter of Sonegawa, 12 I&N Dec. 
612 (Reg. Cornrn. 1967). 
In determinfng the petitioner's ability to pay the proffered wage, CIS will first examine whether the petitioner 
employed the beneficiary at the time the priority date was established. If the petitioner establishes by 
documentary evidence that it employed the beneficiary at a salary equal to or greater than the proffered wage, 
this evidence will be consideredprima facie proof of the petitioner's ability to pay the proffered wage. In the 
instant case, on the Form ETA 750B, signed by the beneficiary on April 10, 2001, the beneficiary does not 
claim the petitioner as a present or past employer. In addition, counsel has not provided any Forms W-2, 
Wage and Tax Statements, or Forms 1099-MISC, Miscellaneous Income, issued by the petitioner for the 
beneficiary, demonstrating that the petitioner employer the beneficiary in 2001 and 2002. Therefore, the 
petitioner has not established that it employed the beneficiary in 2001 and 2002. 
As an alternative means of determining the petitioner's ability to pay the proffered wage, CIS will next 
examine the petitioner's net income figure as reflected on the petitioner's federal income tax return, without 
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. fj 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 
of Soriano, 19 I&N Dec. 764 (BIA 1988). 
- 
Page 4 
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 (9' Cir. 1984)); see also Chi-Feng Chang v. Thornburgh, 719 F. Supp. 532 (N.D. Tex. 
1989); K.C.P. Food Co., Inc. v. Sava, 623 F.Supp. 1080 (S.D.N.Y. 1985); Ubeda v. Palmer, 539 F. Supp. 647 
(N.D. Ill. 1982), afd., 703 F.2d 571 (7' Cir. 1983). In K. C.P. Food Co., Inc., the court held that CIS had 
properly relied on the petitioner's net income figure, as stated on the petitioner's corporate income tax returns, 
rather than the petitioner's gross income. 623 F.Supp at 1084. The court specifically rejected the argument that 
CIS should have considered income before expenses were paid rather than net income. Finally, there is no 
precedent that would allow the petitioner to "add back to net cash the depreciation expense charged for the year." 
See also Elatos Restaurant Corp., 632 F. Supp. at 1054. 
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's net current assets in 2001 and 2002 were -$531,539 and -$411,922, 
respectively. The petitioner could not have paid the proffered wage of $21,548.80 in 2001 and 2002 from its 
net current assets. 
On appeal, counsel asserts that depreciation should be added back to the net income when determining the 
petitioner's ability to pay the proffered wage of $21,548.80. Counsel's argument that the petitioner's 
depreciation deduction should be included in the calculation of its ability to pay the proffered wage is 
unconvincing. 
A depreciation deduction does not require or represent a specific cash expenditure during the year claimed. It 
is a systematic allocation of the cost of a tangible long-term asset. It may be taken to represent the diminution 
in value of buildings and equipment, or to represent the accumulation of funds necessary to replace perishable 
equipment and buildings. But the cost of equipment and buildings and the value lost as they deteriorate is an 
actual expense of doing business, whether it is spread over more years or concentrated into fewer. 
2 
 According to Barron's Dictionary of Accounting Terms 1 17 (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 liabilities7' 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. 
Page 5 
While the expense does not require or represent the current use of cash, neither is it available to pay wages. 
No precedent exists that would allow the petitioner to add its depreciation deduction to the amount available 
to pay the proffered wage. Chi-Feng Chang v. Thornburgh, 719 F.Supp. 532 (N.D. Texas 1989). See also 
Elatos Restaurant Corp. v. Sava, 632 F.Supp. 1049 (S.D.N.Y. 1985). The petitioner's election of accounting 
and depreciation methods accords a specific amount of depreciation expense to each given year. The 
petitioner may not now shift that expense to some other year as convenient to its present purpose, nor treat it 
as a fund available to pay the proffered wage. Further, amounts spent on long-term tangible assets are a real 
expense, however allocated. 
Counsel provides a copy of a BALCA case and contends that the petitioner's owner's personal funds should 
be considered when determining the petitioner's ability to pay the proffered wage. However, counsel does 
not state how the Department of Labor's (DOL) BALCA precedent is binding on the AAO. While 8 C.F.R. 4 
103.3(c) provides that precedent decisions of CIS are binding on all its employees in the administration of the 
Act, BALCA decisions are not similarly binding. Precedent decisions must be designated and published in bound 
volumes or as interim decisions. 
 8 C.F.R. 4 103.9(a). 
 Moreover, Ranchito Coletero deals with a sole 
proprietorship and is not directly applicable to the instant petition, which deals with a corporation. 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 a similar case, 
the court in Sitar v. Ashcroft, 2003 WL 22203713 (D.Mass. Sept. 18, 2003) stated, "nothing in the governing 
regulation, 8 C.F.R. $ 204.5, permits [CIS] to consider the financial resources of individuals or entities who 
have no legal obligation to pay the wage." 
Counsel claims that the petitioner's bank statements establish the petitioner's ability to pay the proffered 
wage. However, counsel's reliance on the balances in the petitioner's bank account is misplaced. First, bank 
statements are not among the three types of evidence, enumerated in 8 C.F.R. 4 204.5(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. $ 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 funds 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 will be considered below in determining the 
petitioner's net current assets. 
Counsel asserts that cash at the end of the year, capital stock, paid-in capital, and loans from shareholders 
should all be considered when determining the petitioner's ability to pay the proffered wage of $21,548.80. 
However, the calculation of adding back the cash at the end of the year would be inappropriate. Some portion 
of the petitioner's revenue during a given year is paid in expenses and the balance is the petitioner's net 
- 
 income. Of its net income, some is retained as cash. Adding the petitioner's Schedule L Cash to its net 
income would likely be duplicative, at least in part. The petitioner's Schedule L Cash is included in the 
calculation of the petitioner's net current assets, which are considered separately from its net income. In 
addition, counsel has not provided a published citation that would allow shareholder loans, capital stock, or 
paid-in capital to be considered an asset when determining the ability to pay the proffered wage. 
Furthermore, the petitioner's existent loans will be reflected in the balance sheet provided in the tax return or 
Page 6 
audited financial statement and will be fully considered in the evaluation of the corporation's net current 
assets. Finally, CIS will give less weight to loans and debt as a means of paying salary since the debts will 
increase the firm's liabilities and will not improve its overall financial position. Although lines of credit and 
debt are an integral part of any business operation, CIS must evaluate the overall financial position of a 
petitioner to determine whether the employer is making a realistic job offer and has the overall financial 
ability to satisfy the proffered wage. See Matter of Great Wall, 16 I&N Dec. 142 (Acting Reg. Comm. 1977). 
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 insufficient 
net income or net current assets, CIS may consider the totality of the circumstances concerning a petitioner's 
financial performance. See Matter of Sonegawa, 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, 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 this case, the petitioner has provided tax returns for the years 
2001 and 2002. Since neither of the tax returns establishes the petitioner's ability to pay the proffered wage, 
they are not enough evidence to establish that the business has met all of its obligations in the past or to 
establish its historical growth. There is also no evidence of the petitioner's reputation throughout the industry. 
The petitioner's 2001 tax return reflects an ordinary income or net income of -$65,303 and net current assets 
of -$53 1,539. The petitioner could not have paid the proffered wage of $21,548.80 from either its net income 
or its net current assets in 2001. 
The petitioner's 2002 tax return reflects and ordinary income or net income of -$90,996 and net current assets 
of -$411,922. The petitioner could not have paid the proffered wage of $2 1,548.80 from either its net income 
or its net current assets in 2002. 
For the reasons discussed above, the assertions of counsel on appeal and the evidence submitted on appeal do 
not overcome the decision of the director. 
In visa petition proceedings, the burden of proving eligbility for the benefit sought remains entirely with the 
petitioner. Section 291 of the Act, 8 U.S.C. 5 1361. Here, that burden has not been met. 
- 
Page 7 
ORDER: The appeal is dismissed