dismissed EB-3 Case: Floral Design

IdentKflng data deleted to 
prevent efealrly unwarranted 
invasion of personal privacy 
PUBLIC COPY 
U.S. Department of Homeland Security 
20 Mass Ave. N.W., Room A3042 
Washington, DC 20529 
U.S. Citizenship 
and Immigration 
Services 
'2 I,, 4 
FILE: WAC 04 029 52188 Office: CALIFORNIA SERVICE CENTER Date: WAR 2 4 2006 
PETITION: 
 Immigrant Petition for Other Worker Pursuant to 5 203(b)(3) of the Immigration and 
Nationality Act, 8 U.S.C. 1 153(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. 
Robert P. Wiemann, Director 
Administrative Appeals Office 
WAC 04 029 52 188 
Page 2 
DISCUSSION: 
 The employment based immigrant visa petition was denied by the Director, California Service 
Center, and is now before the Administrative Appeals Office (AAO) on appeal. The appeal will be dismissed. 
The petitioner is a flower shop. It seeks to employ the beneficiary permanently in the United States as a floral 
designer. 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, counsel submits a brief and additional evidence. 
Section 203(b)(3)(A)(iii) of the Immigration and Nationality Act (the Act), 8 U.S.C. § 1153(b)(3)(A)(iii), 
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 unskilled labor, not of a temporary or seasonal 
nature, for which qualified workers are not available in the United States. 
The regulation at 8 C.F.R. § 204.5(g)(2) states, in pertinent part: 
Ability of prospective employer to pay wage. Any petition filed by or for an employment- 
based immigrant which requires an offer of employment must be accompanied by evidence 
that the prospective United States employer has the ability to pay the proffered wage. The 
petitioner must demonstrate this ability at the time the priority date is established and 
continuing until the beneficiary obtains lawful permanent residence. Evidence of this ability 
shall be in the form of copies of annual reports, federal tax returns, or audited financial 
statements. 
Eligibility in this matter hinges on the petitioner's continuing ability to pay the wage offered beginning on the 
priority date, the day the request for labor certification was accepted for processing by any office within the 
employment system of the Department of Labor. 
 See 8 C.F.R. 8 204.5(d). 
 Here, the request for labor 
certification was accepted on April 10, 2001. The proffered salary as stated on the labor certification is $12.38 
per hour or $25,750.40 per year. 
With the petition, the petitioner, through counsel, submitted copies of its 2001 and 2002 Forms 1120S, U.S. 
Income Tax Returns for an S Corporation. The petitioner's 2001 tax return reflected an ordinary income or net 
income of $20,248 and net current assets of $12,305. The petitioner's 2002 tax return reflected an ordinary 
income or net income of -$5,881 and net current assets of $0. The director considered this documentation 
insufficient and on June 4,2004, he requested additional evidence pertinent to the petitioner's ability to pay the 
proffered wage from the priority date of April 10, 2001 and continuing to the present. The petitioner was 
informed that the evidence must be either in the form of copies of annual reports, federal tax returns with 
appropriate signatures and dates, or audited financial statements. The director specifically requested complete 
copies of the beneficiary's 2001 through 2003 Forms W-2, Wage and Tax Statements. In addition, the director 
notified the petitioner that it had failed to submit a copy of its 2003 federal tax return. 
WAC 04 029 521 88 
Page 3 
In response, counsel submitted additional copies of the petitioner's 2001 and 2002 Forms 1120S, U.S. Tax 
Returns for an S Corporation, a copy of the petitioner's 2003 Form 7004, Application for Automatic Extension 
of Time to File Corporation Income Tax Return, and copies of cancelled paychecks for the beneficiary for parts 
of 2003 and 2004. The beneficiary's cancelled paychecks for part of 2003 totaled $15,500, and the 
beneficiary's cancelled paychecks for part of 2004 totaled $4,609.68. It is noted that one check dated August 
14,2004 was not included in the total of $4,609.68 as it was marked non-negotiable. 
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, on September 20,2004, denied the petition. 
On appeal, counsel submits a copy of the petitioner's 2003 Form 1120S, U.S. Tax Return for an S Corporation 
and copies of the petitioner's bank statements for the period between January 1, 2001 and October 8, 2004. 
Counsel asserts that the petitioner has established its ability to pay the proffered wage since its tax returns has 
had an increase in gross receipts every year for the past three years, and since the petitioner has always 
maintained a monthly corporate bank account balance that could have more than paid the beneficiary's monthly 
salary of $2,145.86. The petitioner's 2003 Form 1120s reflects an ordinary income or net income of $13,414 
and net current assets of $0. The petitioner's bank statements reflect a range from a high of $44,874.96 to a low 
of $33.43. 
In determining the petitioner's ability to pay the proffered wage, Citizenship and Immigration Services (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 considered prima facie proof of the petitioner's ability to 
pay the proffered wage. In the present matter, the petitioner did not establish that it had employed the 
beneficiary in 2001 through 2003 at a salary equal to or greater than the proffered wage. While the petitioner 
did provide cancelled checks for the beneficiary for parts of 2003 and 2004, those checks only totaled $15,500 
in 2003 and $4,609.68 in 2004. The petitioner is obligated to show that it can pay the difference between the 
proffered wage and the actual wages paid to the beneficiary. In 2003, that difference would have been 
$10,250.40 ($25,750.40 proffered wage - $15,500 wages paid to the beneficiary in 2003 = $10,250.40). The 
petitioner's net income in 2003 was $13,414. The petitioner has established that it could pay the difference 
between the proffered wage and the actual wages paid to the beneficiary in 2003. Tax returns for 2004 and 
cancelled checks for 2001 and 2002 were not submitted. 
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 
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. 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), am., 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 
WAC 04 029 52 188 
Page 4 
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 during 2001 and 2002 were $12,305 and $0, respectively. The 
petitioner could not have paid the proffered wage in 2001 and 2002 from its net current assets. 
Counsel asserts that the petitioner has established its ability to pay the proffered wage since it has shown that 
gross receipts have increased each year for the past three years, and because the petitioner has always 
maintained a monthly corporate bank account balance sufficient to pay the beneficiary's monthly wage of 
$2,145.86. While counsel is correct that the petitioner has increased its gross receipts each year in 2001 through 
2003, that increase does not assure that the petitioner has the ability to pay the proffered wage. Gross receipts 
must be considered in conjunction with the cost of doing business, resulting in ordinary income or net income. 
CIS does not merely take into account one item on a tax return, but must consider the whole financial picture 
presented by the tax return. 
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. tj 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 
1 
 According to Barron's Dictionaly of Accounting Terms 117 (31~ 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. 
WAC 04 029 52 188 
Page 5 
deductions) or the cash specified on Schedule L that was considered below in determining the petitioner's net 
current assets. 
Finally, 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, however, the petitioner has provided pertinent tax returns for three years, 2001 
through 2003, with each tax return reflecting net income and net current assets less than the proffered wage. 
There is also no evidence of the petitioner's reputation throughout the industry. 
The 2001 tax return reflects an ordinary income or net income of $20,248 and net current assets of $12,305. 
The petitioner could not have paid the proffered wage from either its net income or its net current assets in 
2001. No evidence was provided of the wages paid to the beneficiary in 2001, therefore, the AAO cannot 
determine if the petitioner was able to pay the difference between the proffered wage and the actual wages paid 
to the beneficiary. 
The 2002 tax return reflects an ordinary income or net income of -$5,881 and net current assets of $0. The 
petitioner could not have paid the proffered wage from either its net income or its net current assets in 2002. No 
evidence was provided of the wages paid to the beneficiary in 2002, therefore, the AAO cannot determine if the 
petitioner paid the proffered wage in 2002. 
The 2003 tax return reflects an ordinary income or net income of $13,414 and net current assets of $0. The 
petitioner could not have paid the proffered wage from either its net income or its net current assets in 2003. 
However, the record of proceeding shows wages paid to the beneficiary in 2003 of $15,500. When adding the 
wages paid to the beneficiary and the net income, the result is more than the proffered wage of $25,750.40 
WAC 04 029 52 188 
Page 6 
($15,500 wages paid to the beneficiary in 2003 + $13,414 net income = $28,914; $28,914 - $25,750.40 
proffered wage = $3,163.60 more than the proffered wage). 
In 2004, the record of proceeding shows that the beneficiary was paid $4,609.68, $21,140.72 less than the 
proffered wage. Tax returns for 2004 were not submitted. 
The petitioner has submitted insufficient evidence of its 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. 5 1361. 
The petitioner has not met that burden. 
ORDER: The appeal is dismissed.