dismissed EB-3 Case: E-Business

U.S. Department of Homeland Security 
20 Mass. Ave., N.W., Rrn. 3000 
Washington, DC 20529 
identifying data deleted to 
prevent clearly unwarranted 
invasion of personal privacj 
U.S. Citizenship 
and Immigration 
APR 17 2003 
I 
FILE: -b office: VERMONT SERVICE CENTER 
EAC 05 099 52609 
Date: 
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. 
Administrative Appeals Office 
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 website developer and "e-business" solutions provider. It seeks to employ the beneficiary 
permanently in the United States as a staff service coordinator. As required by statute, the petition is 
accompanied by a Form ETA 750, Application for Alien Employment Certification, approved by the U.S. 
Department of Labor. 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 denial dated August 5, 2005, 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)(ii) of the Immigration and Nationality Act (the Act), 8 U.S.C. 5 1153(b)(3)(A)(ii), 
provides for granting preference classification to qualified immigrants who hold baccalaureate degrees and 
are members of the professions. 
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. 
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 U.S. Department of Labor. See 8 C.F.R. 5 
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 U.S. Department 
of Labor and submitted with the instant petition. Matter of Wing's Tea House, 16 I&N Dec. 158 (Act. Reg. 
Comm. 1977). 
Here, the Form ETA 750 was accepted on June 4,2003.' The proffered wage as stated on the Form ETA 750 
is $37,307.00 per year. 
1 
 It has been approximately four years since the Alien Employment Application has been accepted and the 
proffered wage established. According to the employer certification that is part of the application, ETA Form 
750 Part A, Section 23 b., states "The wage offered equals or exceeds the prevailing wage and I [the 
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 
pertinent evidence in the record, including new evidence properly submitted upon appeal.' 
Relevant evidence in the record, relative to the ability to pay the proffered wage, includes copies of the 
following documents: the original Form ETA 750, Application for Alien Employment Certification, approved 
by the U.S. Department of Labor; a U.S. Internal Revenue Service Form 1065 tax return for 2003; and, a 
filing extension for the petitioner's 2004 tax return. 
The evidence in the record of proceeding shows that the petitioner is structured as a domestic limited liability 
company. On the petition, the petitioner claimed to have been established in 1995 and to currently employ 
four 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 11, 2003, the beneficiary stated that she 
was employed by the petitioner from September 1998 to at least April 1 1,2003. 
We note that although the director requested on March 18, 2005, that the petitioner submit the beneficiary's 
W-2 Wage and Tax statements for 2003 and 2004, no wage evidence was submitted. There is no explanation 
for the lack of wage evidence that may be used on its own and with other financial evidence to demonstrate 
the ability of the petitioner to pay the proffered wage. Failure to submit requested evidence that precludes a 
material line of inquiry shall be grounds for denying the petition. 8 C.F.R. 5 103.2(b)(14). Further, although 
the director requested additional evidence from the priority date, June 4, 2003, to present, counsel responded 
on June 10,2005, that the petitioner requested on October 13,2004, an extension of time to file its partnership 
tax return. There has been sufficient time for the petitioner to supply additional financial evidence since that 
date, (specifically its tax returns), but no tax returns for years after 2003 were submitted on appeal. 
On appeal, the petitioner asserts that the financial documents submitted demonstrate the petitioner's ability to 
pay the proffered wage. Counsel contends that although the 2003 tax return submitted only stated net income 
in the amount of $10,150.00 deductions such as depreciation, wage and salaries expense are evidence of the 
ability to pay the proffered wage. 
Counsel cites an unpublished AAO decision for the proposition that CIS must consider the normal accounting 
practices of a company. Counsel asserts that the "totality of the circumstances test" is the standard to be used 
in this matter. 
Counsel asserts that an accounting test called "current ratio analysis" demonstrates the liquidity of the 
petitioner and its ability to pay the proffered wage. 
Further, according to counsel, bank statements submitted demonstrate "superior liquidity." According to 
counsel, the bank statements for the period June 2003 through December 2004 show the cash flow to the 
company, and, that the average balance for each month states sufficient cash to pay the monthly proffered 
employer] guarantee that, if a labor certification is granted, the wage paid to the alien when the alien begins 
work will equal or exceed the prevailing wage which is applicable at the time the alien begins work." 
2 
 The submission of additional evidence on appeal is allowed by the instructions to the CIS 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). 
wage. We disagree. 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 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. However, if the petitioner wishes to rely on 
cash flow as evidence of ability to pay, the petitioner must submit documentary evidence, such as a detailed 
business plan and audited cash flow statements. 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 (Cornrn. 1998) (citing Matter of Treasure Craft of Cal$ornia, 14 I&N Dec. 190 (Reg. Comm. 
1972)). 
Accompanying the appeal, counsel submits a legal brief and evidence that includes copies of the following 
documents: a U.S. Internal Revenue Service Form 1065 tax return for 2003; a filing extension for the 
petitioner's 2004 tax return; the petitioner's bank checking register statements for May, June, July, August, 
September, October, November, December, 2003 with related statement of accounts; the petitioner's bank 
checking register statements for January, February, March, April, May, June, 2004, with related statement of 
-accounts; and, statement of accounts from July 1 through December 3 1,2004. 
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 lawful 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 CFR 
fj 204.5(g)(2). In evaluating whethet a job offer is realistic, Citizenship and Immigration Services (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 is also considered . See Matter of 
Sonegawa, 12 I&N Dec. 612 (BIA 1967). The petitioner has provided a statement of its business checking 
accounts from May 2003 through December 2004 with payroll information provided but although the 
beneficiary represented on the labor certification that she was employed by the petitioner from September 
1998 to at least April 1 1,2003, her wage information was not provided. 
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 has not established that it employed and paid the beneficiary the full proffered 
wage from the priority date. 
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 
Page 5 
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. Ill. 1982), affd, 703 F.2d 571 (7th Cir. 1983). 
Reliance on the petitioner's gross sales and profits exceeded the proffered wage is misplaced. Showing that 
the petitioner's gross sales and profits exceeded the proffered wage is insufficient. Similarly, showing that 
the petitioner paid wages in excess of the proffered wage is insufficient. 
The petitioner's appellate argument that its depreciation expenses should be considered as cash is misplaced. 
In K. C.P. Food Co., Inc. v. Sava, 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. Id. at 1084. 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. that 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 tax return demonstrates the following financial information concerning the petitioner's ability to pay: 
In 2003, the Form 1065 stated net income3 of $10,150.00 with a Schedules K-1 
stating net incomes distnbutions4 of $6,598.00, $3,552.00. 
Since the proffered wage is $37,307.00 per year, the petitioner did not have the ability to pay the proffered 
wage from an examination of its net income for 2003, or the difference between wages actually paid and the 
proffered wage. 
If the net income the petitioner demonstrates it had available during the 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 liabilitie~.~ 
 A 
3 
IRS Form 1065, Line 22. 
4 
 IRS Schedule K- 1, Line 1, "Ordinary Income (loss) from trade or business activities." 
corporation's year-end current assets are shown on Schedule L, lines 1 through 6 and include cash-on-hand. 
Its year-end current liabilities are shown on lines 15 through 17. 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. 
The petitioner's net current assets during 2003 were <$369,607.00>~. 
Therefore, the petitioner did not have sufficient net current assets to pay the proffered wage in 2003. 
Therefore, from the date the Form ETA 750 was accepted for processing by the U.S. Department of Labor, 
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 contends that wage and salaries expense are evidence of the ability to pay the proffered wage. 
Counsel's statement must be qualified. Since the director requested but did not receive wage information 
stating the wages paid by the petitioner to the beneficiary for any year, we do not have any information to 
determine the ability to pay the proffered wage from wages paid to the beneficiary. Further, counsel cites no 
legal precedent for the contention, and, according to regulation,7 copies of annual reports, federal tax returns, 
or audited financial statements are the means by which petitioner's ability to pay is determined. The 
assertions of counsel do not constitute evidence. Matter of Obaigbena, 19 I&N Dec. 533, 534 (BIA 1988); 
Matter of Ramirez-Sanchez, 17 I&N Dec. 503, 506 (BIA 1980). Wages already paid to others are not available 
to prove the ability to pay the wage proffered to the beneficiary at the priority date of the petition and continuing 
to the present since they are expenses not assets. 
Counsel refers to a decision issued by the AAO concerning the accounting practices, but does not provide its 
published citation. While 8 C.F.R. 5 103.3(c) provides that precedent decisions of CIS are binding on all its 
employees in the administration of the Act, unpublished decisions are not similarly binding. Precedent decisions 
must be designated and published in bound volumes or as interim decisions. 8 C.F.R. 5 103.9(a). 
Counsel asserts that the "totality of the circumstances test" is the standard to be used in this matter. 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. 6 12 (Reg. Comm. 1 967).8 
5 
 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 as accounts 
payable, short-term notes payable, and accrued expenses (such as taxes and salaries). Id. at 118. 
6 
 The symbols <a number> indicate a negative number, or in the context of a tax return or other financial 
statement, a loss. 
' 8 C.F.R. 5 204.5(g)(2). 
8 
 Matter of Sonegawa, 12 I&N Dec. 612 (BIA 1967), relates to petitions filed during uncharacteristically 
unprofitable or difficult years but only in a framework of profitable or successful years. 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 
In the present case, the petitioner is a corporation that had been in business for four years at the time the Form 
ETA 750 was filed. The petitioner had $400,295.00 in gross receipts and paid out $227,191 .OO in wages and 
salaries during the year in which the priority date was established. The petitioner also submitted the petition 
which showed that it employed a total of four employees in 2003. With only one tax return submitted, no 
specific wage information relating to the beneficiary or to any other employee, it is not possible to determine 
according to Matter of Sonegawa if year 2003 was or was not a representative year for the petitioner in terms 
of its over-all profitability. 
Counsel asserts that an accounting test called "current ratio analysis" demonstrates the liquidity of the 
petitioner and its ability to pay the proffered wage. Counsel claims that the current ratio, current 
assetslcurrent liabilities, shows that the petitioner has the ability to pay the proffered wage in each relevant 
year. Financial ratio analysis is the calculation and comparison of ratios that are derived from the information 
in a company's financial statements. The level and historical trends of these ratios can be used to make 
inferences about a company's financial condition, its operations, and attractiveness as an investment. The 
AAO notes that there is no single correct value for a current ratio, rendering it less useful for determinations 
of an entity's ability to pay a specific wage during a specific period. In isolation, a financial ratio is a useless 
piece of inf~rmation.~ 
While counsel argues that the current ratio shows the petitioner has the ability to pay the proffered wage, he 
provides no evidence of any industry standard that would allow a comparison with the petitioner's current 
ratio. In addition, he has not provided any authority or precedent decisions to support the use of current ratios 
in determining the petitioner's ability to pay the proffered wage. Moreover, because the current ratio is not 
designed to demonstrate an entity's ability to take on the additional, new obligations such as paying an 
additional wage, this office is not persuaded to rely upon it. 
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 Time 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. 
9 
 The observation that a particular ratio is high or low depends on the purpose for which the ration is being 
observed. In context, however, a financial ratio can give a financial analyst an excellent picture of a 
company's situation and the trends that are developing. A ratio gains utility by comparison to other data and 
standards, such as the performance of the industry in which a company competes. Ratio Analysis enables the 
business ownerlmanager to spot trends in a business and to compare its performance and condition with the 
average performance of similar businesses in the same industry. Important balance sheet ratios measure 
liquidity and solvency (a business's ability to pay its bills as they come due) and leverage (the extent to which 
the business is dependent on creditors' funding). Liquidity ratios indicate the ease of turning assets into cash 
and include the current ratio, quick ratio, and working capital. See Financial Ratio Analysis, 
httr>://www.finpipe.com/equity/finratan.htm (accessed March 2 1, 2006); Financial Management, Financial 
Ratio Analysis, ht~://www.zeromillion.com/business/Gnancial/financial-ratio.html (accessed March 2 1, 
2006); Industry Financial Ratios, Financial Ratio Analysis, 
http://www.ventureline .com/FinAnal indAna1ysis.a~~ (accessed March 2 1,2006). 
The evidence submitted fails to establish that the petitioner has the continuing ability to pay the proffered 
wage beginning on the priority date. 
The burden of proof in these proceedings rests solely with the petitioner. Section 291 of the Act, 8 U.S.C. 
tj 1361. The petitioner has not met that burden. 
ORDER: The appeal is dismissed.