dismissed EB-3 Case: Culinary

iutifying data deleted to 
pvent clearly unwarranted 
invasion of personal +vBCY 
U.S. Department of Homeland Security 
20 Mass. Ave., N.W., Rrn. 3000 
Washington, DC 20529 
U. S. Citizenship 
and Immigration 
Services 
EAC 02 200 5 1705 
IN RE: 
PETITION: 
 Immigrant petition for Alien Worker as a Slulled Worker or Professional pursuant to section 
203(b)(3) of the Immigration and Nationality Act, 8 U.S.C. $ 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. 
Administrative Appeals Office 
Page 2 
DISCUSSION: The director denied the employment-based preference visa petition, and the matter is now before 
the Administrative Appeals Office (AAO) on appeal. The appeal will be dismissed. 
The petitioner is an ethnic Moroccan restaurant. It seeks to employ the beneficiary permanently in the United 
States as a chef. 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 and denied the petition accordingly. 
On appeal, new counsel states the petitioner does have the ability to pay the proffered wage. Counsel submits a 
statement and no further evidence. 
Section 203(b)(3)(A)(i) of the Immigration and Nationality Act (the Act), 8 U.S.C. !j 1 153(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. !j 1153(b)(3)(A)(ii), provides 
for the granting of preference classification to qualified immigrants who hold baccalaureate degrees and are 
members of the professions. 
The regulation at 8 C.F.R. 9 204.5(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 C.F.R. !j 204.5(d). Here, the Form ETA 750 was accepted for processing on April 
25,2001. The proffered wage as stated on the Form ETA 750 is $26,000 annually. 
On the petition, the petitioner indicated it was established in 1987, has ten employees, a gross annual income of 
$468,034, and a net annual income of $6,568. With the petition, the petitioner submitted IRS Forms 1120, federal 
corporate income tax return, for the years 2000 to 2001, as well as letters of work verification for the beneficiary. 
The income tax documentation indicated that the petitioner had taxable income before net operating loss 
deduction and special deductions taxable income of -$13,324 in tax year 2001, and of $6,568 in tax year 2001. 
Because the evidence submitted was insufficient to demonstrate the petitioner's continuing ability to pay the 
proffered wage beginning on the priority date, on August 27, 2003, the director requested additional evidence 
Page 3 
pertinent to that ability. The director stated that the petitioner's 2001 federal income tax return did not indicate 
sufficient net income to pay the proffered wage, and that the petitioner's 2001 Schedule L balance sheet indicated 
current liabilities in excess of current assets. The director specifically requested that the petitioner provide copies 
of its 2002 U.S. corporate income tax, with all schedules and attachments. The director also requested that, if the 
petitioner had employed the beneficiary in the years 2001 or 2002, the petitioner should submit the beneficiary's 
W-2 forms. The director also requested information as to whether the proffered position was a newly created 
position, and if not, for how long had the position existed. The director also requested information as to the wage 
the petitioner is currently paying the employee in the proffered position. If the beneficiary was talung the place of 
a former employee, the petitioner should identify the former employee, evidence of the salary paid to him or her 
and document that the position was vacated. Finally the director requested that the petitioner submit copies of its 
Forms 941 for the last quarter in which the former employee was employed by the petitioner and for all quarters 
since, and to submit copies of the petitioner's payroll documents listing its employees by name and the wages 
paid to them for the same period. 
In response, counsel stated that the present position was not a newly created one, and that it was create 
With regard to any wages paid to the individual who presently held the position, counsel stated that %iuih 
, the owner and sole shareholder has previously performed the duties of the position. Counsel stated that 
compensation that was previously available to the petitioner's shareholder for his chef duties would not be 
available to pay the proffered wage. Counsel stated that the sole shareholder had been overseeing the management 
of the business part of the restaurant as well as working as a chef. 
Counsel stated that with regard to the petitioner's 2001 federal income tax return, although the taxable income 
was $6,568, the petitioner held other assets that demonstrated sufficient liquidity to pay the proffered wage. In 
particular, counsel stated that the petitioner's 200 1 tax return indicated the petitioner paid officer compensation of 
$10,100 because the ownerlshareholder was working at the restaurant as chef due to the shortage of qualified 
employees. Counsel also noted that the petitioner's tax return indicated capital stock in the amount of $140,000. 
Counsel described the capital stock item as monies invested in the petitioner for financial stability and as a liquid 
variable. Counsel also stated that the capital stock demonstrated the bona fide nature and business viability of the 
petitioner. Counsel noted additional paid-in capital listed on Schedule L of $90,493. Counsel then stated that the 
capital stock is in reserves for such express purposes to be available to the petitioner for needs as they arise and at 
the time of the 2001 filing, was more than sufficient to supplement the finances of the corporation to pay wages or 
purchase inventory, among other items. Counsel stated that the officer compensation of $10,100 and the capital 
stock of $140,000 combined totaled $150,100, and thus it is reasonable to conclude that the beneficiary would 
have received the proffered wage as of the 200 1 filing date under all circumstances. 
With regard to tax year 2002, counsel stated that the petitioner had taxable income of $23,093. Counsel bher 
noted that the sole shareholderlchef received wages of $44,900 in tax year 2002. Counsel submitted a Form W-2 
for 
 2002 wages. Counsel states that the wages paid to in tax year 2002 alone were 
enough to establish the etitioner's ability to pay the proffered wage of $26,000. Counsel submitted a Form W-2 
for tax year 2003 for that indicated he had earned $46,000 as of November 7, 2003. Counsel also 
submitted a 2003 payroll record to confirm wages paid to Counsel stated that as the beneficiary 
would take over chef duties from the compensation previously available to the petitioner's sole 
shareholder would now be available to pay the beneficiary's proffered wage. 
Page 4 
Counsel submitted Form 940-EZ, Employer's Annual Federal Unemployment (FUTA) Tax Return for calendar 
2001 that indicated the petitioner made total wages payments of $104,329.75 in 2001, and that the petitioner paid 
wages to eleven employees during 2001. 
Counsel also submitted IRS Form 941, Employer's Quarterly Employee Tax Return for the last quarter of 2002 
that indicated the petitioner paid $40,954.85 in wages, tips and other compensation during that quarter. Counsel 
also submitted the petitioner's FUTA Tax Return for calendar 2002 that indicated the petitioner paid $1 72,861.70 
in taxable wages and FUTA taxes. A state of Virginia form, VA-6, indicated the Virginia income tax paid for the 
petitioner's employees and identified sixteen employees to whom total wages and compensation of $167,155.45 
were paid. Counsel also submitted IRS FormW-3 that indicated total Social Security wages paid of $1 66'3 1 1.70 
in tax year 2002 to seventeen employees whose W-2 forms were also submitted to the record. 
Counsel also submitted the petitioner's payroll records dated September 10, 2003 that indicated the petitioner paid 
ten employees and identified them by name and salary. A second page of the payroll Ex ress Check Register also 
identified salaries earned as of September 10, 2000. The document indicates that earned $38,000 as 
of the September date. 
Counsel then stated that the hiring of the beneficiary as chef would allow the reorganization of the existing staff 
and their schedules to possibly accommodate requests for fewer or different hours. Counsel asserted that the 
beneficiary's wages would be paid from the same pool of resources that the current employee and officer wages 
are drawn from. Counsel also stated that hiring the beneficiary into the permanent position would generate 
increased revenues for the petitioner. Counsel stated that sometimes a modest net income is not necessarily 
unfavorable to the petitioner. The beneficiary is an experienced Moroccan chef and will be applying this 
experience to produce a cost effective work product and reduce the need for other workers on his shift as well as 
projected increased revenues for the petitioner. Counsel then stated that the development of the petitioner's 
business depended on the strategy to realign responsibilities so that the ownerlshareholder could give his present 
workload to the beneficiary and do new projects. 
Counsel also stated that it had been held by several courts that CIS had to consider other sources of income 
pledged by the employer to pay the proffered wage. Counsel cited Full Gospel Portland Church v. Th 
730 F. Supp. 441, 449 (D.C. 1988). Counsel also submitted ated November 17, 2003 by 
the petitioner's ownerlsole shareholder. In his letter, stated that he had read and agreed with 
the contents of the counsel's memorandum, and that chef position was still open and would reduce the owner's 
obligations as a chef that would free up his time and allow him to focus on other aspects of the restaurant and 
other business ventures. 
P 
tated that the petitioner would be able to finance this position out of its own 
cash flow and resources 
 concluded by stating that not withstanding his previous statement he would 
personally guarantee payment of the beneficiary's wages, even if it meant using personal funds or resources, since 
the beneficiary's employment brought immediate production value to the business. 
On December 13, 2004, the director determined that the evidence submitted did not establish that the petitioner 
had the continuing ability to pay the proffered wage beginning on the priority date, and denied the petition. The 
director reviewed the petitioner's tax return for 2001 and determined that the petitioner had neither sufficient net 
income nor net current assets to pay the proffered wage. With regard to tax year 2002, the director stated that the 
Page 5 
petitioner had taxable income of $23,093, and no net current assets. The director then stated that the petitioner had 
not established its ability to pay the proffered wage in tax year 2002. 
With regard to the beneficiary assuming the chef duties preformed by the sole shareholder and thus the sole 
shareholder's compensation being available to compensate the beneficiary, the director stated that Citizenship and 
Immigration Services (CIS) did not agree that the officer compensation on the petitioner's return was a source of 
available funds with which to compensate the beneficiary. The director noted that the compensation of officers 
represented monies already expended by the corporation. The director determined that the sole shareholder's 
compensation in tax years 2001 or 2002 was not available to pay the proffered wage. 
With regard to the use of the petitioner's capital stock to establish the petitioner's ability to pay the proffered 
wage, the director stated that capital stock did not represent funds with which to compensate the beneficiary but 
rather was a part of the shareholder's equity position in the corporation and did not represent liquid assets. 
The director also noted that CIS did not consider the sole shareholder's personal income as a source of additional 
funds, since the petitioner was not a sole proprietorship or unincorporated association, in which the individual 
owners have a legal responsibility for the debts of the business. The director stated that the petitioner was a 
corporation, and that the assets of a stockholder cannot be considered in determining the petitioner's ability to pay 
the proffered wage. 
On January 6, 2005, counsel submitted a motion to reopen and reconsider that the director granted. On motion, 
counsel stated that the petitioner had sufficient financial resources to pay the proffered wage of $26,000. Counsel 
submitted documentation with regard to an employee who counsel claimed worked as a cook for the petitioner in 
200 1, 2002, and 2003. Counsel stated that this employee was no longer working for the petitioner, and submitted 
a letter from Vice President, to further substantiate this assertion. In her letter stated that 
the petitioner employed an individual in the position similar to the one offered to the beneficiary, and that this 
- ~ 
 -. 
individual was employed from 2001 to 2003.oted that since the employee was no longer employed by 
the company, based on these past wages, the petitioner had the ability to pay the proffered wage to the 
beneficiary. 
Counsel submitted three W-2 forms for tax years 2001, 2002, and 2003. The W-2 for 2001 contained a Social 
Security Number but the name and address of the petitioner's employee was blank.' The W-2s for tax year 2002 
and 2003 indicated neither a social security number nor the name and address of the employee. Based on the W- 
2s submitted, the petitioner paid the employee in question a salary of $22,080 in 2001, $24,960 in 2002, and 
$23,040 in 2003. Counsel stated that the remaining wage obligations between the former employee's salaries and 
the proffered wage of $26,000 could be made up from either the petitioner's net income or a portion of the 
corporate officer's compensation from each of the last three years. Counsel noted that in tax year 2003 the 
officer's compensation was available to pay the difference of $2,960 between the former employee's salary and 
1 
 Based on the Social Security number, and the petitioner's state and federal documentation on unemployment 
tax and salaries previously submitted to the record, the 2001 W-2 is for 
 In addition, the 
petitioner's W-2 forms for tax year 2002 indicate that 
 received compensation of $24,960 in the 
year 2002. 
Page 6 
the proffered wage in tax year 2003. Counsel submitted the petitioner's 2002 and 2003 federal corporate income 
tax return. These two documents indicated the petitioner had net income of $23,093 in tax year 2002 and -$I 7,137 
in tax year 2003. They also indicated officer compensation of $42,900 in 2002 and $52,400 in 2003. 
On April 26, 2005, the director reviewed the petitioner's motion to reopen and reconsider the denial of the 1-140 
petition. The director determined that the ground of denial had not been overcome and dismissed the motion. The 
director stated that the petitioner had not identified the former employee referenced by the petitioner's vice 
president nor was any documentary evidence submitted with regard to the employee's termination. On motion the 
director determined that the petitioner had not submitted credible evidence of the petitioner's ability to pay the 
proffered wage to the beneficiary based on the information with regard to the claimed former employee. 
The director also noted that the petitioner's assertion that the beneficiary would replace an employee whose 
wages were included in the wages shown on the petitioner's tax returns contradicted the petitioner's previous 
claim. The director stated that the petitioner claimed previously that the beneficiary would be assuming duties 
currently performed by the sole shareholder, and that the funds shown on the tax return for officer compensation 
would be used to pay the proffered wage. The director noted that it was incumbent on the petitioner to resolve any 
inconsistencies in the record by independent objective evidence, and attempts to explain or reconcile such 
inconsistencies, absent competent objective evidence point to where the truth, in fact, lies, would not sufice. The 
director cited Matter ofHo, 22 I&N Dec. 206 (Comm. 1998). 
On appeal, new counsel states that the director's denial for the petitioner was arbitrary, capricious, and an abuse 
of discretion because CIS failed to consider the totality of the circumstances and the evidence in the record. 
Counsel states that in its denial CIS refused to consider the compensation paid to the officer as a source of 
available hnds because CIS believes that the compensation of officers represents monies already expended by the 
corporation. Counsel states that CIS in incorrect in its analysis and that the correct analysis should focus on 
whether the money was available to pay the beneficiary had the beneficiary been able to perform the duties of the 
position instead of the owner himself. Counsel states that the response to his analysis should have been yes, the 
monies would have been available if the beneficiary had been able to replace the owner as chef. Counsel further 
asserts that CIS is incorrect in its refusal to consider the owner's own source of funds as evidence of the 
petitioner's ability to pay the proffered wage. 
Counsel states that small businesses comprise the largest percentage of businesses in the United States, and most 
small businesses are "mom and pop" operations whose livelihoods depend on their business success. Counsel 
states that while these small business operations, like the petitioner, may not be legally liable for petitioners' debts 
and obligations, this does not mean the owner's financial resources cannot be part of the equation. Counsel 
contends that although the legal system in the United States creates an incentive for owners by protecting them 
from liabilities if the businesses fail, the stockholders of a business could easily shift assets to the corporation to 
demonstrate its ability to pay. Counsel states that CIS insistence that it will not consider financial resources of the 
petitioner's owner is short sighted and in direct contravention of public policy. 
Counsel finally states that the petitioner did not provide contradictory testimony when it stated that the 
beneficiary would replace the owner to do the work of a chef, rather than the employee who left the petitioner's 
employment. Counsel states that the evidence with regard to the former employee was provided to show that in 
Page 7 
addition to the evidence previously provided, the petitioner could also consider other financial resources that 
would have been available had the alien been able to work for the petitioner. Counsel states that the beneficiary 
could have been hired to replace the owner himself or the employee who left the company at the discretion of the 
petitioner. Counsel states that sufficient evidence exists in the case to warrant a reversal of the decision. 
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. The petitioner did not claim to have employed the beneficiary as of the priority 
date. Thus, the petitioner did not establish that it employed and paid the beneficiary the full proffered wage in 
2001 and onward, and has the obligation to establish its ability to pay the entire proffered wage of $26,000 to the 
beneficiary as of the priority date 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, 
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)' afd, 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 further noted: 
Plaintiffs also contend the depreciation amounts on the 1985 and 1986 returns are non-cash 
deductions. Plaintiffs thus request that the court sua sponte add back to net cash the depreciation 
expense charged for the year. Plaintiffs cite no legal authority for this proposition. This argument 
has likewise been presented before and rejected. See Elatos, 632 F. Supp. at 1054. [CIS] and judicial 
precedent support the use of tax returns and the net income,figures in determining petitioner's ability 
to pay. Plaintiffs' argument that these figures should be revised by the court by adding back 
depreciation is without support. 
(Emphasis in original.) Chi-Feng at 537. 
The petitioner is structured as a corporation. The petitioner's net income is the taxable income shown on line 28, 
taxable income before NOL deduction and special deductions on its IRS Form 1120. The petitioner submitted its 
federal corporate income tax returns for tax years 2000,2001,2002 and 2003.~ In tax years 2001,2002, and 2003, 
2 
 The petitioner's 2000 federal income tax returns are not dispositive in the present proceedings, as the priority 
Page 8 
the petitioner's net income was as follows: $6,568, $23,093, and -$17,137. None of these figures is sufficient to 
pay the proffered wage of $26,000. 
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. In addition, 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 liabilitie~.~ 
 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 
tax returns reflect the following information for the tax years 2001 and 2002: 
Taxable income4 $ 6,568 $ 23,093 $ -17,137 
Current Assets $ 12,266 $ -1,923 $ -32,351 
Current Liabilities $ 15,938 $ 0 $ 0 
Net current assets $ -3,672 $ -1,923 $ -17,151 
The petitioner has not demonstrated that it paid any wages to the beneficiary during 2001. In 2001, as previously 
illustrated, the petitioner shows a taxable income of $6,568, and negative net current assets of $3,672, and has not, 
therefore, demonstrated the ability to pay the proffered wage. The petitioner has not demonstrated that it paid any 
wages to the beneficiary during 2002. In 2002, the petitioner shows a taxable income of $23,093 and negative net 
current assets of $1,923, and has not, therefore, demonstrated the ability to pay the proffered wage. In 2003, the 
petitioner shows a taxable income of -$I 7,137 and negative net current assets of $1 7,671, and has not, therefore, 
demonstrated the ability to pay the proffered wage. Thus, the petitioner cannot establish its ability to pay the 
proffered wage based on its net income or net current assets as of the 2001 priority date and onward. 
date year is 2001. The AAO will not examine the petitioner's 2000 tax return in its consideration of the 
petitioner's net income or net current assets. 
3 
 According to Barron S Dictionary of Accounting Terms 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 1 18. 
4 
 As previously stated, taxable income is the sum shown on line 28, taxable income before NOL deduction and 
special deductions, IRS Form 1120, U.S. Corporation Income Tax Return. 
Page 9 
In its response to the director's request for mher evidence, the petitioner submitted evidence with regard to the 
beneficiary replacing the sole shareholder as chef, and on motion submitted evidence with regard to the 
beneficiary replacing an employee the petitioner claimed no longer worked for it. 
With regard to the beneficiary replacing the sole shareholder as chef and thus allowing the use of officer 
compensation to pay the proffered wage as of the priority date year, the petitioner provided no evidentiary 
documentation that the sole shareholder actually worked as the petitioner's chef. The sole shareholder likely 
performed duties other than simply cooking, such as management duties. Even if the AAO were to accept that the 
sole shareholder was willing to give up his compensation, the record of proceeding does not show the amount of 
funds that was for compensation as a cook, which would be the only funds available to show the petitioner's 
ability to pay the proffered wage. Therefore the replacement theory advocated by counsel is not demonstrated by 
the record of proceedings. Even if all of the sole shareholder's compensation was considered a source of 
additional financial resources beyond the petitioner's net income or net current assets, the sole shareholder's 
compensation in 2001, namely $10,100, in combination with the petitioner's net income of $6,568 or the 
petitioner's net current assets of -$3,672, is not sufficient to establish the petitioner's ability to pay the proffered 
wage of $26,000 as of the priority year 2001. 
With regard to the use of the former employee's wages to pay the proffered wage, the evidence submitted to the 
record is problematic. First, as previously stated, the identity of the employee the petitioner claims worked for 
him in the years 2001 through 2003 and then terminated hls employment can be established for tax year 2001, 
through the employee's social security number on the petitioner's already submitted W-2 forms and other 
employment records. However, the petitioner provides no explanation for why it chose not to identify the 
employee more clearly in either tax year 2001, and the ensuing tax years 2002 and 2003. Second, there is no 
evidence in the record that the former employee did indeed perform the duties of the proffered position, namely, 
chef, and that he is presently not working for the petitioner. Although the petitioner and counsel assert that the 
unidentified employee is not working for the petitioner, they did not establish when the employee resigned or was 
terminated. Again, the assertions of counsel and the petitioner do not constitute evidence. Matter of Obaigbena, 
19 I&N Dec. 533, 534 (BIA 1988); Matter of Rarnirez-Sanchez, 17 I&N Dec. 503, 506 (BIA 1980). Of more 
probative weight would be evidence cited by the director in his request for further evidence, namely copies of its 
Forms 941 for the last quarter in which the former employee was employed by the petitioner and for all quarters 
after his termination that are available. 
It is also noted that while the petitioner can choose to use the officer compensation to establish the petitioner's 
ability to pay the proffered wage during one year in question, and the wages of a terminated employee to establish 
the petitioner's ability in another year, the petitioner must provide enough evidentiary documentation to clearly 
establish these two alternative sources of further funds. To date, the petitioner has not provided sufficient 
evidence as to the employment of the former employee as a chef and his termination. The AAO will further 
examine below the use of officer compensation to establish the petitioner's ability to pay the proffered wage. 
Counsel on motion and new counsel on appeal state that officer compensation can be considered an additional 
source of funds with which to pay the proffered wage. In fact, contrary to the director's statement, the sole 
shareholder of a corporation has the authority to allocate expenses of the corporation for various legitimate 
business purposes, including for the purpose of reducing the corporation's taxable income. Compensation of 
Page 10 
officers is an expense category explicitly stated on the Form 1120 U.S. Corporation Income Tax Return. For this 
reason, the petitioner's figures for compensation of officers may be considered as additional financial resources of 
the petitioner, in addition to its figures for ordinary in~ome.~ 
To determine whether or not an entity's officer compensation would have been available to the proffered wage, 
CIS examines many issues, including the flexibility that the shareholders have in setting their own compensation; 
the profitability of the corporation; whether the officer compensation is discretionary as opposed to wages which 
are not discretionary; andlor whether the officer compensation is substantially more than the amount of the 
proffered wage. In addition, the CIS would examine whether the amount of officer compensation varies over the 
course of the pertinent years, and whether the officer receiving the compensation is the sole ownerlstockholder or 
majority owner1stockholder. 
In addition, the totality of the circumstances (i.e., other information in the record) should support the fact that the 
petitioner is a viable, profitable enterprise. Such information would include issues examined in Matter of 
Sonegawa, 12 I&N Dec. 6 12 (BIA 1967), relating to petitions filed during uncharacteristically unprofitable or 
difficult years but only in a framework of profitable or successful years. In Matter of Sonegawa, the courts looked 
at such issues as the petitioner's longevity, number of employees, and reputation, in examining the totality of the 
petitioner's circumstances. 
The documentation presented here indicates that 
 100 percent of the company's stock. 
According to the petitioner's IRS Forms 1 120 Schedule E (Compensation of Officers), 
 elected to pay 
himself $14,400 in 2000,~ $10,100 in 200 1, $42,900 in 2002, and $52,400 in 2003. These figures are supported by 
the sole shareholder's W-2 Forms for 200 1 and 2002, which were submitted for the record. We note here that the 
compensation received by the company's owners during these four years was not a fixed salary and varied from 
year to year. 
Contrary to counsel's assertion on appeal, CIS (legacy INS) has long held that it may not "pierce the corporate 
veil" and look to the assets of the corporation's owner to satisfy the corporation's ability to pay the proffered 
wage. It is an elementary rule that a corporation is a separate and distinct legal entity Erom its owners and 
shareholders. See Matter of M7 8 I&N Dec. 24 (BL4 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 the instant petition, while the AAO will not examine the personal assets of the petitioner's owner and sole 
shareholder, it can examine the financial flexibility that the employee-owner has in setting his salary based on the 
profitability of his business. Upon review of the record, the petitioner provided no Forms 941 with which to 
-- 
5 
 Even if the replacement theory is not borne out by the record of proceedings, the use of such compensation 
may be considered whether the sole shareholderlofficer is engaged or not engaged in the actual operations of the 
petitioner simply as a matter of the sole shareholder's discretion. 
While the petitioner's tax return for tax year 2000 is not dispositive, the AAO includes the officer 
compensation for that tax year in its consideration of officer compensation for illustrative purposes. 
Page 11 
establish its actual number of employees and salaries paid in tax year 2001, although the petitioner's 1120 tax 
return indicated total wages and salaries of $72,808, with officer compensation of $10,100.' In examining the 
petitioner's Quarterly Federal Tax Returns (Form 941) and the FUTA tax documentation for 2002 and 2003, the 
petitioner has a staff of eleven employees in 2001 and sixteen employees in 2002. It is noted that three employees 
in both years, including the owner/sole shareholder, earned salaries over $20,000 while the remaining employees 
are lower wages employees or working part-time. At the same time, the petitioner's gross receipts and salaries 
have grown over the tax years 2001 to 2003. In 2001, the petitioner's gross receipts were $468,034 and wages 
paid were $72,808, while in tax year 2002, the petitioner's gross receipts were $510,338 and wages paid were 
$87,017. In tax year 2003, the petitioner's gross receipts were $555,160 and wages paid were $121,957. During 
these three tax years, the officer compensation, listed as a separate item on the petitioner's 1120, rose from 
$10,100 to $52,400. 
As stated previously, in tax year 2001, the officer compensation of $1 0,100 would not be sufficient to pay the 
proffered wage to the beneficiary, as it is less than half of the proffered wage. With regard to tax years 2002 and 
2003, the officer compensation is substantially more than the proffered wage of $26,000. 
When examining the totality of the petitioner's circumstances, it is noted that in the 1-140 petition, the petitioner 
stated it had been established in 1987. However, the petitioner submitted no further evidence with regard to its 
longevity, and its reputation as a Moroccan restaurant. See Sonegawa. In examining a petitioner's ability to pay 
the proffered wage, the fundamental focus of the CIS' determination is whether the employer is making a realistic 
job offer and has the overall financial ability to satisfy the proffered wage. Matter of Great Wall, 16 I&N Dec. 
142, 145 (Acting Reg. Comrn. 1977). Accordingly, after a review of the petitioner's federal tax returns and all 
other relevant evidence, we cannot conclude that the petitioner has established that it had the ability to pay the 
salary offered as of the priority date of the petition and continuing to present. 
Beyond the decision of the director, it is noted that two employees of the petitioner, including the sole 
shareholder/owner, have the same last name, and that the beneficiary shares this same last name. Under 20 C.F.R. 
626.20(~)(8) and 656.3, the petitioner has the burden when asked to show that a valid employment relationship 
exists, that a bona jide job opportunity is available to U.S. workers. See Matter of Amger Corp., 87-INA-545 
(BALCA 1987). A relationship invalidating a bonnfide job offer may arise where the beneficiary is related to the 
petitioner by "blood" or it may "be financial, by marriage, or through friendship." See Matter of Summart 374, 
00-INA-93 (BALCA May 15,2000). The AAO would suggest that if the petitioner pursues the instant petition in 
hrther proceedings, that it provide some evidence as to any familial relationship between the beneficiary and the 
petitioner. 
As stated previously, the petitioner has not established that it has the ability to pay the proffered wage from the 
priority date and onward. Therefore, the director's decision shall stand, and the petition shall be denied. 
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. 
7 
The petitioner's Form 941 for the last quarter of 2001 indicates that $27,984 in wages and tips, plus other 
compensation was paid in that quarter alone. In other words, almost half of the petitioner's 2001 wages were paid 
in the last quarter of the year. 
ORDER: The appeal is dismissed.