dismissed EB-3 Case: Food Service

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U.S. Department of Homeland Security 
20 Mass. Ave., N.W., Rm. A3042 
Washington, DC 20529 
U. S. Citizenship 
and Immigration 
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FILE: EAC-04-060-53 1 13 Office: VERMONT SERVICE CENTER Date: MAR 2 4 2006 
IN RE: 
PETITION: 
 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. 5 1153(b)(3) 
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 . Wiemann, Director 
-6 
Administrative Appeals Office 
EAC-04-060-53 1 13 
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 foreign 
food specialty cook. 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. The director denied the petition accordingly. 
On appeal, counsel submits a brief and additional evidence.' 
Section 203(b)(3)(A)(i) of the Immigration and Nationality Act (the Act), 8 U.S.C. 3 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 slulled 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. 3 204.5(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. 
3 204.5(d). 
Here, the Form ETA 750 was accepted on March 8, 2002. The proffered wage as stated on the Form ETA 
750 is $1 1.79 per hour ($24,523.20 per year). On the petition, the petitioner claimed to have been established 
on January 1, 2001, and to have a gross annual income of $105,332. On the Form ETA 750B, signed by the 
beneficiary on March 4, 2002, the beneficiary did not claim to have worked for the petitioner. 
The petitioner submitted the petition with its Form 1065 U.S. Return of Partnership Income for 2002 as 
evidence of the petitioner's ability to pay the proffered wage. On July 28, 2004, the director determined that 
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. 3 103.2(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-04-060-53 1 13 
Page 3 
the petitioner's 2002 federal tax return did not establish that the petitioner had the continuing ability to pay 
the proffered wage at the time of filing and denied the petition accordingly. 
On appeal counsel argues that with additionally submitted evidence the petitioner has established its 
continuing ability to pay the proffered wage and submits the beneficiary's W-2 form and the petitioner's 
unaudited financial statements for 2001 through 2003. 
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 record contains a copy of the 
beneficiary's W-2 form for 2003, which shows that the petitioner hired and paid the beneficiary $12,800 in 
2003. Therefore, the petitioner did not establish that it paid the beneficiary the proffered wage in 2002, the 
year of the priority date, but established that it paid partial proffered wages in 2003. 
If the petitioner does not establish that it employed and paid the beneficiary an amount at least equal to the 
proffered wage during that period, CIS will next examine the net income figure reflected on the petitioner's 
federal income tax return, without consideration of depreciation or other expenses. Reliance on federal 
income tax returns as a basis for determining a petitioner's ability to pay the proffered wage is well 
established by judicial precedent. Elatos Restaurant Corp. v. Sava, 632 F. Supp. 1049, 1054 (S.D.N.Y. 1986) 
(citing Tongatapu Woodcraft Hawaii, Ltd. V. 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). 
Counsel's 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 named as a limited liability company (LLC), however, on Schedule B to Form 1065 tax 
return the petitioner checked box b "Domestic limited partnership". Schedule K-1 for the owner indicates that 
he is a limited partner owning 100% of the business. Like a general partnership, a LLP consists of a general 
EAC-04-060-53 1 13 
Page 4 
partner and multiple limited partners. 
 A general partner is personally liable for the partnership's total 
liabilities. Conversely, a limited partner's liability is limited to his or her initial investment. As such, a 
limited partner's personal assets may not be utilized to show the ability to pay the proffered wage. A LLC, 
like a corporation, is a legal entity separate and distinct from its owners. The debts and obligations of the 
company generally are not the debts and obligations of the owners or anyone else. An investor's liability is 
limited to his or her initial investment. As the owners and others only are obliged to pay a certain portion of 
those debts should they come due, the total income and assets of the owners and others and their ability, if 
they wished, to pay the company's debts and obligations, cannot be utilized to demonstrate the petitioner's 
ability to pay the proffered wage. In either case, the petitioner must show its ability to pay the proffered wage 
out of the business own funds. 
The record contains a copy of the petitioner's Form 1065 U.S. Return of Partnership Income for 2002. The 
petitioner's tax return demonstrates that the petitioner had a net loss of $66,404~ in 2002, the year of the 
priority date, which is insufficient to pay the beneficiary the proffered wage that year. 
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 liabilitie~.~ A LLC's 
year-end current assets are shown on Schedule L of Form 1065, lines 1 through 6. 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. 
Calculations based on the Schedule L's attached to the petitioner's tax return yield the amounts for net current 
assets as follows: current assets were $2,640 and current liabilities were $1,133, therefore, the net current assets in 
2001 were $1,507. Therefore, the petitioner did not have sufficient net current assets to pay the proffered wage of 
$24,523.20 in 2002, the year of the priority date. 
On appeal, counsel submitted the petitioner's financial statements for the years ended December 31, 2003, 
2002 and 2001. The regulation at 8 C.F.R. 5 204.5(g)(2) makes clear that where a petitioner relies on 
financial statements to demonstrate its ability to pay the proffered wage, those financial statements must be 
audited. An audit is conducted in accordance with generally accepted auditing standards to obtain a 
reasonable assurance whether the financial statements of the business are free of material misstatements. The 
unaudited financial statements that counsel submitted with the petition are not persuasive evidence. The 
accountant's report that accompanied those financial statements makes clear that they were produced pursuant 
Ordinary income (loss) from trade or business activities as reported on Line 22 of Form 1065. 
3~ccording to Barron's Dictionary of Accounting Terms 117 (3'd ed. 2000), "current assets" consist of items 
having (in most cases) a life of one year or less, such as cash, marketable securities, inventory and prepaid 
expenses. "Current liabilities" are obligations payable (in most cases) within one year, such accounts 
payable, short-term notes payable, and accrued expenses (such as taxes and salaries). Id. at 118. 
EAC-04-060-53 1 13 
Page 5 
to a compilation rather than an audit. A compilation is the management's representation of its financial 
position and is the lowest level of financial statements relative to other forms of financial statements. As the 
accountant's report also makes clear, financial statements produced pursuant to a compilation are the 
representations of management compiled into standard form. The unsupported representations of 
management are not reliable evidence and are insufficient to demonstrate the ability to pay the proffered 
wage. 
Therefore, from the date the Form ETA 750 was accepted for processing by the U. S. Department of Labor in 
2002, the petitioner had not established that it had the ability to pay the beneficiary the proffered wage as of 
the priority date through an examination of wage paid to the beneficiary, or its net income, or net current 
assets. 
For the reasons discussed above, the appeal and the evidence submitted fail to overcome the decision of the 
director. 
In visa petition proceedings, the burden of proving eligibility for the benefit sought remains entirely with the 
petitioner. Section 291 of the Act, 8 U.S.C. 5 1361. Here, that burden has not been met. 
ORDER: The appeal is dismissed.