dismissed EB-3 Case: Culinary

PUBLIC COPY 
U.S. Department of Iionleland Security 
20 Mass. Ave., N.W., Rrn. 3000 
Wash~ngton, DC 20529 
U. S. Citizenship 
and Immigration 
b~, 
FILE: EAC 04 143 523 14 Office: VERMONT SERVICE CENTER Date: SEP 0 5 2006 
IN RE: Petitioner: 
Beneficiary: 
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. 8 1153(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. 
~obert P. Wiemann, Chief 
Administrative Appeals Office 
EAC 04 143 52314 
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 cook. 
As required by statute, the petition is accompanied by a Form ETA 750, Application for Alien Employment 
Certification, approved by the United States Department of Labor (DOL). 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 September 16, 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. ?j 1153(b)(3)(A)(i), 
provides for the granting of preference classification to qualified immigrants who are capable, at the time of 
petitioning for classification under this paragraph, of performing skilled labor (requiring at least two years 
training or experience), not of a temporary nature, for which qualified workers are not available in the United 
States. 
The regulation 8 C.F.R. ?j 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 DOL. See 8 C.F.R. ?j 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 DOL and submitted with the instant 
petition. Matter of Wing's Tea House, 16 I&N Dec. 158 (Act. Reg. Cornrn. 1977). 
Here, the Form ETA 750 was accepted on April 27, 2001. The proffered wage as stated on the Form ETA 
750 is $12.60 per hour ($26,208.00 per year based on a 40 hour work week). The Form ETA 750 states that 
the position requires two years of experience in the job offered or two years of experience in commercial 
cooking or a related field. 
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 
EAC 04 143 52314 
Page 3 
pertinent evidence in the record, including new evidence properly submitted upon appeal.' 
 On appeal, 
counsel submits a brief, a previously submitted letter dated October 18, 2002 from the petitioner's sole 
shareholder, IRS Form W-2, Wage and Tax Statement, issued to the beneficiary by the petitioner for 2001, the 
petitioner's unaudited balance sheet for April 2001, the petitioner's bank statement for April 2001 and the 
petitioner's unaudited financial statements for the ten month period ending October 3 1, 2002. Other relevant 
evidence in the record includes the petitioner's IRS Forms 1120S, U.S. Income Tax Returns for an S 
Corporation, for 2001 and 2003, IRS Form W-2, Wage and Tax Statement, issued by the petitioner to the 
beneficiary for 2003, and the petitioner's unaudited financial statements for 2002 and 2003.~ The record does 
not contain any other evidence relevant to the petitioner's ability to pay the wage. 
The evidence in the record of proceeding shows that the petitioner is structured as an S corporation. On the 
petition, the petitioner claimed to have been established in 1991 and to currently employ 13 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 April 16,2001, the beneficiary claimed to have worked for the 
petitioner as a cook from March 2001 to the date he signed the Form ETA 750B. 
On appeal, counsel asserts that the beneficiary has been employed by the petitioner and was paid nearly the 
full proffered wage over the last three years. Counsel states that the director should have considered the 
petitioner's current assets, its wage expense, its depreciation expense, and compensation paid to officers in the 
determination of the petitioner's ability to pay the proffered wage. Counsel further asserts that the director 
should have considered the petitioner's financial statements and cash evidenced by its bank statements in the 
determination of the petitioner's ability to pay the proffered wage. In addition, the petitioner's sole 
shareholder asserts in his supporting letter that the petitioner's gross receipts demonstrate the petitioner's 
ability to pay the proffered wage. He also states that the petitioner had one-time construction and equipment 
expenses in excess of $90,000 in 2001 and 2002 and that the petitioner's business was affected by the difficult 
economic climate in 200 1. 
The petitioner must establish that its job offer to the beneficiary is a realistic one. Because the filing of an 
ETA 750 labor certification application establishes a priority date for any immigrant petition later based on the 
ETA 750, the petitioner must establish that the job offer was realistic as of the priority date and that the offer 
remained realistic for each year thereafter, until the beneficiary obtains lawhl permanent residence. The 
petitioner's ability to pay the proffered wage is an essential element in evaluating whether a job offer is realistic. 
See Matter of Great Wall, 16 I&N Dec. 142 (Acting Reg. Comm. 1977). See also 8 C.F.R. 9 204.5(g)(2). 
In determining the petitioner's ability to pay the proffered wage during a given period, Citizenship and 
Immigration Services (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 beneficiary's IRS Forms W-2 show 
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. 8 103.2(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). 
The record also contains the petitioner's IRS Forms 1120S, U.S. Income Tax Returns for an S Corporation, 
for 1991, 1992, 1993, 1994, 1995, 1996, 1997, 1998, 1999 and 2000. Evidence preceding the priority date in 
2001 is not necessarily dispositive of the petitioner's continuing ability to pay the proffered wage beginning 
on the priority date. 
EAC 04 143 52314 
Page 4 
compensation received from the petitioner of $12,7 17.1 8 in 200 1 and $20,49 1.22 in 2003 .3 Therefore, for the 
years 2001,2002 and 2003, the petitioner has not established that it employed and paid the beneficiary the full 
proffered wage, but it did establish that it paid partial wages in 2001 and 2003. Since the proffered wage is 
$26,208.00 per year, the petitioner must establish that it can pay the difference between the wages actually 
paid to the beneficiary and the proffered wage, which is $13,490.82 in 200 1 and $5,7 16.78 in 2003. 
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. Feld~nan, 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 receipts and wage expense is misplaced. Showing that the petitioner's 
gross receipts exceeded the proffered wage is insufficient. Similarly, showing that the petitioner paid wages 
in excess of the proffered wage is insufficient. In K.C.P. Food Co., Inc. v. Sava, 623 F. Supp. at 1084, the 
court held that the Immigration and Naturalization Service, now CIS, had properly relied on the petitioner's 
net income figure, as stated on the petitioner's corporate income tax returns, rather than the petitioner's gross 
income. The court specifically rejected the argument that the Service should have considered income before 
expenses were paid rather than net income. The court in Chi-Feng Chang 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 Jigures in determining petitioner's ability to pay. Plaintiffs' argument that these 
figures should be revised by the court by adding back depreciation is without support. 
(Emphasis in original.) Chi-Feng at 537. 
The record before the director closed on April 10, 2004. As of that date, the petitioner's 2003 federal income 
tax return is the most recent return availablt4 The petitioner's tax returns demonstrate its net income for 
2001 and 2003, as shown in the table below. 
3 
 Counsel asserts in his brief that the beneficiary has been employed by the petitioner and was paid nearly the 
full proffered wage over the last three years. However, the record does not contain the beneficiary's IRS 
Form W-2 issued by the petitioner in 2002. The W-2 Form would have demonstrated the amount the 
petitioner paid to the beneficiary in wages, tips and other compensation. Going on record without supporting 
documentary evidence is not sufficient for purposes of meeting the burden of proof in these proceedings. 
Matter of Sofici, 22 I&N Dec. 158, 165 (Comm. 1998) (citing Matter of Treasure Craft of California, 14 
I&N Dec. 190 (Reg. Comm. 1972)). 
4 
Counsel states in his brief that the petitioner submitted business records from 1991 to the present and that 
the documents clearly demonstrate the petitioner's ability to pay the proffered wage. However, the record 
does not contain the petitioner's 2002 federal income tax return. Therefore, the petitioner's net income and 
net current assets may not be analyzed against the proffered wage. Going on record without supporting 
documentary evidence is not sufficient for purposes of meeting the burden of proof in these proceedings. 
EAC 04 143 523 14 
Page 5 
In 2001, the Form 1120s stated net income5 of -$63,972.00. 
In 2003, the Form 1120s stated net income6 of $8,870.00. 
Therefore, for the year 2001, the petitioner did not have sufficient net income to pay the difference between 
the wages actually paid to the beneficiary and the proffered wage. For the year 2003, the petitioner had 
sufficient net income to pay the difference between the wages actually paid to the beneficiary and the 
proffered wage. 
As an alternate means of determining the petitioner's ability to pay the proffered wage, CIS may review the 
petitioner's net current assets. 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 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. In 2001, the 
petitioner's tax return stated end-of-year net current assets of $4,907.00. Therefore, for the year 2001, the 
petitioner did not have sufficient net current assets to pay the difference between the wages actually paid to 
the beneficiary and the proffered wage. 
Therefore, from the date the Form ETA 750 was accepted for processing by the DOL, the petitioner had not 
established that it had the continuing ability to pay the beneficiary the proffered wage as of the priority date 
through an examination of wages paid to the beneficiary, or its net income or net current assets. 
Counsel asserts in his brief accompanying the appeal that there is another way to determine the petitioner's 
continuing ability to pay the proffered wage from the priority date. He states that the amounts paid in officer 
compensation should be allocated to the beneficiary's wages. The petitioner's sole shareholder supports this 
contention in a letter supporting the petition. The petitioner's tax returns show that the petitioner paid officer 
compensation of $60,000.00 in 2001 and 2003. The petitioner provided no evidence of the amount of officer 
compensation paid in 2002. The sole shareholder of the petitioner received the entire amount paid in officer 
compensation in 2001 and 2003. The amount of officer compensation does not vary over the course of the 
pertinent years. The petitioner has provided no evidence to establish that the amount does not represent some 
contractually obligated and fixed amount of compensation. Regardless, since the petitioner has failed to 
Matter of Soffici, 22 I&N Dec. 158, 165 (Comm. 1998) (citing Matter of Treasure Craft of California, 14 
I&N Dec. 190 (Reg. Comm. 1972)). 
5 
 Where an S corporation's income is exclusively from a trade or business, CIS considers net income to be the 
figure for ordinary income, shown on line 21 of page one of the petitioner's Form 1120s. However, where an S 
corporation has income, credits, deductions or other adjustments from sources other than a trade or business, they 
are reported on Schedule K. If the Schedule K has relevant entries for additional income or additional credits, 
deductions or other adjustments, net income is found on line 23 of Schedule K. Because the petitioner had 
additional income shown on its Schedule K for 2001, the petitioner's net income is found on line 23 of Schedule 
K of its tax return. 
6 
Ordinary income (loss) from trade or business activities as reported on Line 2 1. 
7 
 According to Barron 's Dictionary of Accounting Term 117 (3'* 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. 
EAC 04 143 52314 
Page 6 
demonstrate the amount of officer compensation paid in 2002, the petitioner has not established that it had the 
ability to pay the proffered wage beginning on the priority date and continuing until the beneficiary obtains 
lawful permanent residence. 
Further, counsel's reliance on the cash 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. 8 204.5(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 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 was considered in determining the 
petitioner's net current assets. 
In addition, with the petition, counsel submitted the petitioner's unaudited balance sheet for April 2001 and its 
unaudited financial statements for 2002 and 2003. The regulation at 8 C.F.R. 8 204.5(g)(2) makes clear that 
where a petitioner relies on financial statements to demonstrate its ability to pay the proffered wage, those 
financial statements must be audited. An audit is conducted in accordance with generally accepted auditing 
standards to obtain a reasonable assurance that the financial statements of the business are free of material 
misstatements. The unaudited financial statements that counsel submitted with the petition are not persuasive 
evidence. The accountant's report that accompanied those financial statements makes clear that they were 
produced pursuant to a compilation rather than an audit. As the accountant's report also makes clear, 
financial statements produced pursuant to a compilation are the representations of management compiled into 
standard form. The unsupported representations of management are not reliable evidence and are insufficient 
to demonstrate the ability to pay the proffered wage. 
Although CIS will not consider gross income without also considering the expenses that were incurred to 
generate that income, the overall magnitude of the entity's business activities should be considered when the 
entity's ability to pay is marginal or borderline. See Matter of Sonegawa, 12 I&N Dec. 612 (Reg. Comm. 
1967). The petitioning entity in Sonegawa had been in business for over 11 years and routinely earned a 
gross annual income of about $100,000. During the year in which the petition was filed in that case, the 
petitioner changed business locations and paid rent on both the old and new locations for five months. There 
were large moving costs and also a period of time when the petitioner was unable to do regular business. The 
Regional Commissioner determined that the petitioner's prospects for a resumption of successful business 
operations were well established. The petitioner was a fashion designer whose work had been featured in 
Tirne and Look magazines. Her clients included Miss Universe, movie actresses, and society matrons. The 
petitioner's clients had been included in the lists of the best-dressed California women. The petitioner 
lectured on fashion design at design and fashion shows throughout the United States and at colleges and 
universities in California. The Regional Commissioner's determination in Sonegawa was based in part on the 
petitioner's sound business reputation and outstanding reputation as a couturiere. As in Sonegawa, CIS 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. CIS 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 CIS deems relevant to the petitioner's ability to pay the proffered wage. 
EAC 04 143 52314 
Page 7 
In the instant case, the petitioner was incorporated in 1991. The evidence establishes that the petitioner's 
gross receipts steadily increased from the date of its incorporation until 2002. For 2002, the petitioner 
provided no evidence of its gross receipts. For 2003, the petitioner's gross receipts were approximately 
$54,000.00 less than its 2001 gross receipts. Further, the evidence establishes that the petitioner's wages and 
salaries steadily increased from the date of its incorporation until 2002. For 2002, the petitioner provided no 
evidence of wages and salaries paid.8 For 2003, the petitioner paid approximately $96,000.00 less in wages 
and salaries than it paid in 2001. The petitioner states that it had a one-time construction and equipment 
expenses in excess of $90,000 in 2001 and 2002. However, the petitioner has provided no evidence of these 
expenses. Going on record without supporting documentary evidence is not sufficient for purposes of 
meeting the burden of proof in these proceedings. Matter of Sofflci, 22 I&N Dec. 158, 165 (Comm. 1998) 
(citing Matter of Treasure Craft of California, 14 I&N Dec. 190 (Reg. Comm. 1972)). Further, the petitioner 
asserts that its business was affected by the difficult economic climate in 2001, apparently in reference to the 
events of September 11, 2001. The record of proceeding contains no evidence specifically connecting the 
petitioner's business decline to the events of September 11, 2001. A mere broad statement by the petitioner 
that its business was affected by the economic climate in 2001 cannot by itself demonstrate the petitioner's 
continuing ability to pay the proffered wage beginning on the priority date. Rather, such a general statement 
merely suggests, without supporting evidence, that the petitioner's financial status might have appeared 
stronger had it not been for the events of September 1 1,2001. Thus, assessing the totality of circumstances in 
this individual case, it is concluded that the petitioner has not established that it had the continuing ability to 
pay the proffered wage beginning on the priority date. 
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 DOL. 
The burden of proof in these proceedings rests solely with the petitioner. Section 291 of the Act, 8 U.S.C. 
$ 1361. The petitioner has not met that burden. 
ORDER: The appeal is dismissed. 
8 
 The petitioner claimed to have 13 full-time and part-time employees in 2002.