dismissed EB-3 Case: Food Service

identifying data deleted to 
prevent ddy unwarranted 
invasion d personal privacy 
PUBLIC COPY 
U.S. Department of Homeland Security 
20 Mass. Ave., N.W., Rm. A3042 
Washington, DC 20529 
U.S. Citizenship 
and Immigration 
Services 
 bi 
FILE: EAC-04-262-50407 Office: VERMONT SERVICE CENTER Date: my 2 3 LUQ~ 
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. 9 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, Chief 
Administrative Appeals Office 
EAC-04-262-50407 
Page 2 
DISCUSSION: The preference visa petition was denied by the Acting Center Director (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 food 
service manager. As required by statute, the petition is accompanied by a Form ETA 750, Application for 
Alien Employment Certification, approved by the 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. 
On appeal, counsel submits a brief statement and additional evidence.' 
Section 203(b)(3)(A)(i) of the Immigration and Nationality Act (the Act), 8 U.S.C. 9 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. fj 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. $ 
204.5(d). Here, the Form ETA 750 was accepted on April 25, 2001. The proffered wage as stated on the 
Form ETA 750 is $74,870.65 per year. On the Form ETA 750B, signed by the beneficiary on April 24,2001, 
the beneficiary did not claim to have worked for the petitioner. On the petition, the petitioner claimed to have 
been established in 1985, and currently to employ 10 workers. The petitioner did not provide any information 
on its gross annual income and net annual income on the petition. 
The petitioner submitted the petition with its Form 1120s tax returns for 2001 through 2003, the owner's 
Form 1040 tax returns for 2001 through 2003, and an experience letter &om the beneficiary's previous 
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. 5 103.2(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 AAO will first evaluate the decision of the director, based on the 
evidence submitted prior to the director's decision. The evidence submitted for the first time on appeal will then 
be considered. 
EAC-04-262-50407 
Page 3 
employer. 
 On November 22, 2004, the director denied the petition, finding that the petitioner did not 
establish that it had the ability to pay the proffered wage beginning on the priority date. 
On appeal counsel asserts that in considering the petitioner's ability to pay the proffered wage the income of 
the previous owner and the current owner for 2001 should be considered since the current owner purchased 
the business from the previous owner in June 2001, and submits the previous owner's tax return for 2001. 
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 petitioner did not submit any evidence of 
the beneficiary's compensation fiom the petitioner and did not claim to have employed and paid the 
beneficiary. 
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. 
On appeal counsel asserts that the petitioner "was established in 1985 withwning and 
operating the restaurant as a sole proprietor. remained the owner and sole proprietor until he 
sold the restaurant to June 2001 who continued to operate the restaurant as a sole proprietor 
until an S Corp., Beyti Kebab Corp., was operable in March 2002." reported his business 
income fiom Beyti Kebab Restaurant at 4105 Park Avenue, Unio 
 on Line 12 and on 
Schedule C to the Form 1040 individual income tax return for 2001. 
 001 individual income tax 
return in the record shows that he also reported his business income from the same Beyti Kebab Restaurant on 
Line 12 and on Schedule C to the Form i040. The AAO c 
 ounsel's ar ument that the petitioner 
was structured as a sole proprietorship in 2001 with either 
 or Contrary to counsel's 
assertion, the petitioner's Form 1120s U.S. Income Tax Return for an S Corporation indicates that the 
petitioner was incorporated as Beyti Kebab Corp. and elected as an S corporation on August 30, 2001. The 
petitioner filed its Form 1120s for 2001 as an S corporation but reported no income for that year. Therefore, 
the AAO will treat the petitioner as a sole proprietorship for 2001 and review the individual income tax return 
and related financial documents for the previous and current owners in determining the petitioner's ability to 
pay the proffered wage in 2001, the year of the priority date in the instant case, but from 2002 through the 
present, the petitioner must be treated as an S corporation. 
Reliance on corporation 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. Ill. 1982), aff'd, 703 F.2d 571 
(7th Cir. 1983). Reliance on its gross receipts with depreciation and on wage expense is misplaced. Showing 
that the petitioner's gross receipts exceeded the proffered wage is insufficient. Similarly, showing that the 
petitioner paid compensation to officers 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 
EAC-04-262-50407 
Page 4 
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 EZutos, 632 
F. Supp. at 1054. [CIS] and judicial precedent support the use of tax returns and the net 
income J;gures 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. 
As previously noted, the petitioner has been an S corporation since 2002. The record contains copies of the 
petitioner's Fonn 1120s U.S. Income Tax Return for an S Corporation for 2002 and 2003. The petitioner's 
tax return indicates that its fiscal year is based on a calendar year. The petitioner's tax return for 2002 stated 
net income2 of $462 and the 2003 tax return stated net income of $3,425. Therefore, the petitioner did not 
have sufficient net income to pay the proffered wage for the years 2002 and 2003. 
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 ~iabilities.~ 
 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. 
Calculations based on the Schedule L's attached to the petitioner's tax returns yield that the petitioner had 
current assets of $1 1,506 and current liabilities of $21,011, therefore, its net current assets were $(9,505) in 
2002; and current assets of $13,15 1 and current liabilities of $21,369, therefore, its net current assets were 
$(8,218) in 2003. Therefore, the petitioner did not have sufficient net current assets to pay the proffered wage 
for the years 2002 and 2003. 
Ordinary income (loss) from trade or business activities as reported on Line 21. 
3 
According to Burron S Dictionary of Accounting Terms 117 (31d 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. 
EAC-04-262-50407 
Page 5 
Therefore, the petitioner had not established that it had the ability to pay the beneficiary the proffered wage in 
2002 and 2003 through an examination of wages paid to the beneficiary, or its net income or net current 
assets. 
Counsel asserts on appeal that: "[the current owner of the petitioner] has other business interests including a 
bakery. He is willing to use whatever income and assets he has available from Beyti Kebab Restaurant and 
his other sources to pay the offered wage to the beneficiary to manage his restaurant." However, counsel does 
not submit any evidence or affidavit to support his assertion. 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). Going on record without supporting documentary evidence is not suffic~ent for 
purposes of meeting the burden of proof in these proceedings. Matter of SofJici, 22 I&N Dec. 158, 165 
(Comm. 1998) (citing Matter of Treasure Craft of California, 14 I&N Dec. 190 (Reg. Comm. 1972)). 
Furthermore, because an S corporation is a separate and distinct legal entity from its owners and shareholders, 
the 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. See Matter of Aphrodite Investments, Ltd., 17 
I&N Dec. 530 (Comrn. 1980). In a similar case, the court in Sitar v. Ashcroft, 2003 WL 22203713 (D.Mass. 
Sept. 18, 2003) stated, "nothing in the governing regulation, 8 C.F.R. tj 204.5, permits [CIS] to consider the 
financial resources of individuals or entities who have no legal obligation to pay the wage." 
As previously noted, the evidence indicates that the petitioner was a sole proprietorship in 2001. Unlike a 
corporation, a sole proprietorship is not legally separate from its owner. Therefore the sole proprietor's 
income, liquefiable assets, and personal liabilities are also considered as part of the petitioner's ability to pay. 
Sole proprietors report income and expenses fiom their businesses on their individual (Form 1040) federal tax 
return each year. The business-related income and expenses are reported on Schedule C and are carried 
forward to the first page of the tax return. Sole proprietors must show that they can cover their existing 
business expenses as well as pay the proffered wage. In addition, they must show that they can sustain 
themselves and their dependents. Ubeda v. Palmer, 539 F. Supp. 647 (N.D. Ill. 1982), afd, 703 F.2d 571 (7th 
Cir. 1983). 
In Ubeda, 539 F. Supp. at 650, the court concluded that it was highly unlikely that a petitioning entity 
structured as a sole proprietorship could support himself, his spouse and five dependents on a gross income of 
slightly more than $20,000 where the beneficiary's proposed salary was $6,000 (approximately thirty percent 
of the petitioner's gross income). 
Therefore, for a sole proprietorship, CIS considers net income to be the figure shown on line 334, Adjusted 
Gross Income, of the owner's Form 1040 U.S. Individual Income Tax Return. The record contains copies of 
the Form 1040 U.S. Individual Income Tax Return of the sole proprietors for 2001. The tax returns 
demonstrated the following financial information concerning the petitioner's ability to pay the proffered wage 
of $74,870.65 per year. 
Form 1040 for 2001 stated adjustable gross income of $43,598. 
Form 1040 for 2001 stated adjustable gross income of $77,538. 
I 
adjusted gross income on Form 1040 was $31,272.65 less than the beneficiary's proffered 
wage in 2001. Therefore, the sole proprietor had insufficient income to pay the proffered wage to the 
4 
 The line for adjusted gross income on Form 1040 is Line 33 for most years, including 2001. 
EAC-04-262-50407 
Page 6 
beneficiary for year 2001 even without consideration of monthly expenses for the sole proprietor's household. 
adjusted gross income on Form 1040 was $2,667.35 more than the beneficiary's proffered wage. 
The petitioner did not submit a statement of monthly expenses for this current owner's household. However, 
it is most likely that the sole proprietor could not meet his two members household's living expenses with 
$2,667.35 in 2001. 
CIS will consider the sole proprietorship's income and his or her liquefiable assets and personal liabilities as 
. . 
part of the petitioner's ability to pay. In the instant case, the 
documents showing the sole proprietor's liquid assets in 2001 for either 
The petitioner has not demonstrated that either the previous owner or current owner had the ability to pay the 
proffered wage as well as to cover existing business and personal expenses with their adjusted gross income 
for 2001. Contrary to counsel's argument, the petitioner must demonstrate that either of them had the ability 
to pay the proffered wage and to cover the sole proprietor's living expenses instead of combining their income 
together. 
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. 
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 any office within the employment system of the 
Department of Labor. 
The burden of proof in these proceedings rests solely with the petitioner. Section 291 of the Act, 8 U.S.C. 
8 1361. The petitioner has not met that burden. 
ORDER: The appeal is dismissed.