dismissed EB-3 Case: Food Service Management

U.S. Citizenship Non-Precedent Decision of the
and Immigration Administrative Appeals Office 
Services 
In Re: 26399921 Date : MAY 16, 2023 
Appeal of Texas Service Center Decision 
Form 1-140, Immigrant Petition for Alien Workers (Skilled Worker) 
The Petitioner, the operator of a gelato and coffee bar franchise, seeks to permanently employ the 
Beneficiary as store manager . The company requests his classification under the third-preference, 
immigrant visa category for "skilled workers ." See Immigration and Nationality Act (the Act) section 
203(b)(3)(A)(i), 8 U.S.C. § 1153(b)(3)(A)(i). This category allows a prospective U.S. employer to 
sponsor a noncitizen for lawful permanent residence to work in a position requiring at least two years 
of training or experience. Id. 
The Director of the Texas Service Center denied the petition . The Director concluded that the 
Petitioner did not demonstrate its required ability to pay the offered position's proffered wage and 
willfully misrepresented the Beneficiary 's alleged ownership interest in the company. On appeal, the 
Petitioner contends that the Director mistakenly identified the Beneficiary as a company owner and 
that the record establishes its ability to pay the proffered wage. 
The Petitioner bears the burden of demonstrating eligibility for the requested benefit by a 
preponderance of the evidence . Matter of Chawathe , 25 I&N Dec . 369 , 375-76 (AAO 2010) . 
Exercising de novo appellate review, see Matter of Christa's, Inc. , 26 I&N Dec. 537, 537 n.2 (AAO 
2015), we conclude that the record does not support the willful misrepresentation finding. But the 
Petitioner has not demonstrated its ability to pay the offered position 's proffered wage . We will 
therefore dismiss the appeal. 
I. LAW 
Immigration as a skilled worker generally follows a three-step process . First , a prospective employer 
must obtain certification from the U.S . Department of Labor (DOL) that: a) there are insufficient U.S. 
workers able, willing, qualified , and available for an offered position ; and b) permanent employment of 
a noncitizen in the position would not harm wages and working conditions of U.S. workers with similar 
jobs . Section 212(a)(5)(A)(i) of the Act, 8 U.S .C. § 1182(a)(5)(A)(i) . 
Second , an employer must submit an approved labor certification with an immigrant visa petition to 
U.S . Citi zenship and Immigration Services (USCIS) . Section 204(a)(l)(F) of the Act, 8 U.S.C . 
§ 1154(a)(l)(F). Among other things, USCIS determines whether a noncitizen beneficiary meets the 
requirements of a DOL-certified position and a requested immigrant visa category. 8 C.F.R. 
§ 204.5(1)(3)(ii)(B). 
Finally, if USCIS approves a petition, a beneficiary may apply for an immigrant visa abroad or, if 
eligible, "adjustment of status" in the United States. See section 245 of the Act, 8 U.S.C. § 1255. 
II. ANALYSIS 
A. Willful Misrepresentation of a Material Fact 
Misrepresentations are willful if they are "deliberately made with knowledge of their falsity." Matters 
of Valdez, 27 I&N Dec. 496, 498 (BIA 2018) (citations omitted). A misrepresentation is material 
when it has a "natural tendency to influence, or [be] capable of influencing, the decision of the 
decision-making body to which it was addressed." Id. 
A willful misrepresentation of a material fact on an accompanying labor certification warrants a 
petition's denial. USCIS may approve a filing if "the facts stated in the petition are true." Section 
204(b) of the Act. A petition includes any supporting evidence - including a labor certification. 
8 C.F.R. § 103.2(b)(l). Thus, USCIS cannot approve a petition if the facts stated on an accompanying 
labor certification are untrue. 
The Director issued a request for additional evidence (RFE), asking the Petitioner for - among other 
things - a copy of the Beneficiary's IRS Form W-2, Wage and Tax Statement, for 2021. In the 
Petitioner's RFE response, the company's president stated that the Beneficiary "is not able to receive 
a W2 from his business, as he is the member of the Limited Liability Company [LLC]." Under Texas 
law, "[t]he owners of an LLC are called 'members."' Tex. Sec'y of State, "Selecting a Business 
Structure," www. sos. state. tx. us/ corp/business structure. shtml. 
The Director interpreted the RFE response to indicate the Beneficiary's membership in the petitioning 
LLC. On the labor certification, the Petitioner did not disclose any ownership interest of the 
Beneficiary in the company. Part C.9 of the labor certification asked the Petitioner: "Is the employer 
a closely held corporation, partnership, or sole proprietorship in which the alien has an ownership 
interest ... ?" The company checked the box marked "No." A noncitizen's ownership interest in a 
closely held employer creates a presumption of an offered position's unavailability to U.S. workers. 
20 C.F.R. § 656.17(1). Also, a business's officers and principals are presumed to be aware and 
informed of the organization and staff of their enterprise. Matter of Silver Dragon Chinese Rest., 
19 I&N Dec. 401,404 (Comm'r 1986). Thus, the Director concluded that the Petitioner concealed the 
Beneficiary's alleged ownership interest in the company, willfully misrepresenting a material fact. 
As the Petitioner contends, however, the record does not support the company's employment of the 
Beneficiary, his purported ownership interest in the company, or its willful misrepresentation of a 
material fact. As previously indicated, the Petitioner's RFE response stated that the Beneficiary "is 
not able to receive a W2 from his business, as he is the member of the Limited Liability Company" 
( emphasis added). By "his business," the Petitioner states that it meant the LLC that the Beneficiary 
owns and began operating in 2011, a separate business from the Petitioner. The Petitioner notes that 
online state government records identify the Beneficiary as the "Registered Agent" of the other LLC. 
2 
See Tex. Comptroller of Pub. Accts., 'Taxable Entity Search," mycpa.cpa.state.tx.us/coa/. Additional 
evidence also indicates that the Beneficiary owns and works for the other LLC, including: 
• The Beneficiary listed the other LLC as his current employer on the labor certification; 
• A copy of his resume identifies him as the "Owner" of the other LLC; 
• Copies of the Petitioner's federal income tax returns for 2020 and 2021 omit him as an owner 
of the Petitioner; 
• When applying for a nonimmigrant treaty investor visa under section 101 (a)( l 5)(E) of the Act, 
8 U.S.C. § 110l(a)(l5)(E), in 2011, the Beneficiary was buying a Texas LLC and planned to 
operate it; and 
• USCIS has approved multiple nonimmigrant treaty investor visas by the other LLC for the 
Beneficiary, allowing him to manage and work for the LLC. See, e.g., WAC 20 199 51137. 
Thus, the record indicates that the Beneficiary does not work for the Petitioner or have an ownership 
interest in it, and that it did not willfully misrepresent his alleged ownership on the labor certification. 
We will therefore withdraw the Director's contrary findings. 
B. Ability to Pay the Proffered Wage 
A petitioner must demonstrate its continuing ability to pay an offered position's proffered 
wage, from 
a petition's priority date until a beneficiary obtains lawful permanent residence. 8 C.F.R. 
§ 204.5(g)(2). Evidence of ability to pay must generally include copies of a business's annual reports, 
federal tax returns, or audited financial statements. Id. 
In determining ability to pay, USCIS examines whether a petitioner paid a beneficiary the full proffered 
wage each year, beginning with the year of a petition's priority date. If a petitioner did not annually 
pay the full proffered wage or did not pay a beneficiary at all, USCIS considers whether the business 
generated annual amounts of net income or net current assets sufficient to pay any differences between 
the proffered wage and wages paid. If net income and net current assets are insufficient, USCIS may 
consider other factors affecting a petitioner's ability to pay a proffered wage. Matter of Sonegawa, 
12 I&N Dec. 612, 614-15 (Reg'l Comm'r 1967). 1 
The Petitioner's labor certification states the proffered wage of the offered position of store manager 
as $69,000 a year. The petition's priority date is September 20, 2021, the date DOL accepted the labor 
certification application for processing. See 8 C.F .R. § 204.5( d) ( explaining how to determine a 
petition's priority date). 
The Petitioner did not submit evidence that it paid the Beneficiary wages. Thus, based solely on wages 
paid, the record does not establish the company's ability to pay the proffered wage. 
1 Federal courts have upheld USCTS' method of determining a petitioner's ability to pay a proffered wage. See, e.g., River 
St. Donuts, LLC v. Napolitano. 558 F.3d 111, 118 (1st Cir. 2009); Rizvi v. Dep 't ofHomeland Sec., 37 F. Supp. 3d 870, 
883-84 (S.D. Tex. 2014), aff'd, 627 Fed. App'x. 292 (5th Cir. 2015). 
3 
As previously indicated, the record contains a copy of the Petitioner's federal income tax return for 
2021, the year of the petition's priority date. The return reflects net income of $5,476 2 and net current 
assets of $6,754. Neither amount equals nor exceeds the annual proffered wage of $69,000. Thus, as 
the Director's found, the Petitioner's federal income tax return does not demonstrate its ability to pay 
in 2021. 
The Petitioner claimed its submission of a profit and loss statement listing the company's 2021 profits 
as $95,494, more than the annual proffered wage. But the record contained only a profit and loss 
statement for January 2022 through June of 2022, listing a profit of $55,604. The record therefore 
does not establish the Petitioner's ability to pay the proffered wage in 2021 based on its profits. 
An affidavit from the Petitioner's president asserts that the company had $74,973.80 available to pay 
the proffered wage in 2021. He said that amount includes a "non-cash" equipment depreciation 
expense of $36,875 and his 2021 salary of $38,098.80, which he stated he would not have received 
had the Beneficiary begun working for the company that year. 
USCIS, however, does not generally consider a depreciation expense to reflect available fonding for 
a proffered wage. Rather, a depreciation expense represents a legitimate cost of doing business. See, 
e.g., Rizvi, 37 F. Supp. 3d at 880, ajf'd, 627 Fed. App'x 292, (citations omitted) (finding USCIS' 
method of calculating net income "without consideration of depreciation" to be "well-established by 
judicial precedent"). Also, the record does not support the claimed $38,098.80 salary of the 
Petitioner's president in 2021. The company's tax return states that, as LLC members, the president 
and his spouse received guaranteed payments of $33,000 that year. See Matter ofHo, 19 I&N Dec. 
582, 591 (BIA 1988) (requiring a petitioner to resolve inconsistencies with independent, objective 
evidence pointing to where the truth lies). Moreover, neither 2021 salary amount ($33,000 or 
$38,098.80) would equal or exceed the annual proffered wage of $69,000. 
On appeal, the Petitioner submits claimed, audited profit and loss statements for 2021 and 2022. The 
statements reflect annual net income amounts exceeding the annual proffered wage in both years: 
$85,030 in 2021; and $71,309 in 2022. 
The record, however, shows that the Director's 2022 RFE provided the Petitioner with sufficient notice 
and opportunity to submit the 2021 statement before the petition's denial. We therefore decline to 
accept the 2021 statement on appeal. See Matter of Soriano, 19 I&N Dec. 764, 766 (BIA 1988) 
(refusing to consider evidence on appeal where a petitioner received notice of the required evidence 
and a reasonable opportunity to provide it before a petition's denial). 
Also, the Petitioner and the company that prepared the 2021 and 2022 profit and loss statements claim 
that it "audited" the statements "in accordance with Statements on Standards for Accounting and Audit 
2 The Director found that the Petitioner reported net income of -$27,524 in 2021. But Schedule K of Form 1065, U.S. 
Return of Partnership Income, indicates the company's receipt of additional income that year. See Internal Revenue Serv. 
(IRS), 2021 Instructions for Form 1065, 28, www.irs.gov/pub/irs-prior/i 1065--2021.pdf ( describing Schedule K as "a 
summary schedule of all the partners' shares of the partnership's income, credits, deductions, etc."). We therefore consider 
the net income amount listed on Schedule K to reflect the company's 2021 income more accurately. "Entities formed as 
LLCs that are classified as partnerships for federal income tax purposes have the same filing requirements as domestic 
partnerships." Id. at 4. 
4 
Services issued by the American Institute of Certified Public Accountants." But, according to the 
institute's guide to financial statement services, an audit report must "express[] an opinion on whether 
the financial statements are presented fairly, in all material aspects, in accordance with the applicable 
financial reporting framework." Am. Inst. of Certified Pub. Accountants, "Guide to Financial 
Statement Services: Compilation, Review and Audit," 7, us.aicpa.org/content/dam/aicpa/ 
interestareas/privatecompaniespracticesection/qualityservicesdelivery/keepingup/downloadabledocu 
ments/financial-statement-services-guide.pdf. The report on the Petitioner's finances in 2021 and 
2022 does not expressly state an opinion on whether the financial statements are presented fairly, in 
all material aspects. Further, at one point, the report states that "we have compiled Profit and Loss 
statement for year ended December 21, 2021 and December 15, 2022." (emphasis added). Unlike for 
an audit, an accountant "does not obtain any assurance for a compilation because she is not required 
to verify the accuracy or completeness of the information provided or otherwise gather evidence for 
the purposes of expressing an audit opinion." Am. Inst. of Certified Pub. Accountants, "Guide to 
Financial Statement Services: Compilation, Review and Audit," supra, at 5. Thus, the record does 
not establish that the Petitioner's 2021 and 2022 financial statements are "audited," meeting the 
regulatory requirement. See 8 C.F.R. § 204.5(g)(2) (listing "audited" financial statements as 
acceptable evidence of ability to pay); see generally 6 USCIS Policy Manual E.(4)(A)(3) ("Audited 
financial statements are financial statements that have been examined under an acceptable standard by 
an accountant authorized by the jurisdiction to perform the audit.") 
As previously indicated, we may consider other factors affecting the Petitioner's ability to pay the 
proffered wage under Sonegawa. We may consider: the number of years the company has been doing 
business; its number of employees; growth of its business; its reputation in its industry; the occurrence 
of uncharacteristic expenses or losses; or other factors affecting the Petitioner's ability to pay. See 
Matter ofSonegawa, 12 I&N Dec. at 614-15. 
The record indicates the Petitioner's continuous business operations since 2015 and its employment 
of eight people. Copies of the company's federal income tax returns show that, from 2020 to 2021, 
its revenues nearly doubled, although the Petitioner admits that the COVID-19 pandemic especially 
hurt business in 2020. Unlike the petitioner in Sonegawa, however, the record does not demonstrate 
the Petitioner's possession of an outstanding business reputation in its industry or its incurrence of 
uncharacteristic expenses or losses that prevented its ability to pay the proffered wage in 2021. Thus, 
based on a totality of circumstances under Sonegawa, the Petitioner has not demonstrated its 
continuing ability to pay the proffered wage from the petition's priority date onward. 
III. CONCLUSION 
The record does not support the Petitioner's willful 
misrepresentation of the Beneficiary's alleged 
ownership interest in the company on the accompanying labor certification. The company, however, 
has not demonstrated its ability to pay the offered position's proffered wage. 
ORDER: The appeal is dismissed. 
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