dismissed EB-3 Case: Information Technology

PUBLIC COPY 
identifying date deWd to 
p~event dearly unwarranted 
invasion of pemnal privacy 
U.S. Department of EIomeland Security 
20 Mass. Ave., N.W., Rrn. 3000 
Washington, DC 20529 
U. S. Citizenship 
and Immigration 
Services 
FILE: 
LIN-05-021-50764 
 Date: APR 2 6 2007 
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. $ 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. 
Administrative Appeals Office 
Page 2 
DISCUSSION: The preference visa petition was denied by the Acting Director (Director), Nebraska Service 
Center, and is now before the Administrative Appeals Office (AAO) on appeal. The appeal will be dismissed. 
The petitioner is an IT consulting services company. It seeks to employ the beneficiary permanently in the 
United States as a software engineer (software consultant). As required by statute, the petition is 
accompanied by a Form ETA 750, Application for Alien Employment Certification, approved by the 
Department of Labor (DOL). 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 September 15, 2005 denial, the only 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)(i) of the Immigration and Nationality Act (the Act), 8 U.S.C. 5 1 153(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. Section 203(b)(3)(A)(ii) of the Act provides for the granting of preference classification to qualified 
immigrants who hold baccalaureate degrees and who are members of the professions. 
The regulation 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 April 30, 2001. The proffered wage as stated on the Form ETA 
750 is $64,300 per year. The Form ETA 750 states that the position requires four years of college studies, a 
bachelor's degree in computer science, electr~cal/electronic engineering, management information 
systems/information systems and two years of experience in the job offered or in the related occupation of 
software analysis and development occupations. 
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 (26 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 appeal1. Relevant evidence 
in the record includes the petitioner's corporate federal tax returns for 2001 through 2003, the petitioner's 
bank statements and balance sheets for 2001 through 2004, and the beneficiary's W-2 forms for 2001 through 
' 
2003. The record does not contain any other evidence relevant to the petitioner's ability to pay the wage. 
The evidence in the record of proceeding shows that the petitioner is structured as an S corporation. The 
petitioner claimed to have been established in 1994, to have a gross annual income of $180,000, and to 
currently employ 5 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 on April 26, 200 1, the beneficiary claimed to have worked 
for the petitioner since April 1999. 
On appeal, counsel asserts that the petitioner has net current assets exceeding the wages offered to the 
beneficiary at the time the application was filed in 2001 and continues to show that the current assets are in 
excess of the proffered wage. 
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 lawfbl 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 C.F.R. 204.5(g)(2). In 
evaluating whether 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 will be considered if the evidence warrants such consideration. 
See Matter of Sonegawa, 12 I&N Dec. 612 (Reg. Comrn. 1967). 
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 submits the beneficiary's W-2 forms for 2001 through 2003 issued by the 
petitioner and copies of the beneficiary's pay stubs in 2004. The W-2 forms show that the petitioner paid the 
beneficiary the following amounts of compensation in the relevant years: $50,000 in 2001, $50,000 in 2002 
and $26,333.33 in 2003. The beneficiary's paystubs for the period ending February 15,2004 and October 15, 
2004 show that the petitioner paid the beneficiary $2,708.33 semi-monthly in 2004, which is greater than the 
proffered wage level. Thus, although the petitioner established that it paid the beneficiary the proffered wage 
in 2004, the petitioner failed to establish its ability to pay the proffered wage through wages paid to the 
beneficiary from 2001 to 2003. The petitioner is obligated to demonstrate that it could pay the difference of 
$14,300 in 2001 and 2002, and $37,966.67 in 2003 between wages actually paid to the beneficiary and the 
proffered wage with its net income or net current assets. 
I 
 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. fj 103.2(a)(l) and 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). 
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). 
Reliance on its gross income and gross profit is misplaced. Showing that the petitioner's total income 
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. Reliance on the petitioner's 
depreciation in determining its ability to pay the proffered wage is misplaced. The court in K.C.P. Food Co., 
Inc. v. Sava 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 record contains copies of the petitioner's Form 1120s U.S. Income Tax Retwn for an S Corporation for 2001 
through 2003. The petitioner's tax returns for 2001 through 2003 demonstrate the following financial 
information concerning the petitioner's ability to pay the difference between wages actually paid to the 
beneficiary and the proffered wage from the priority date to 2003: 
In 2001, the Form 1120s stated a net income2 of $(72,648). 
In 2002, the Form 1120s stated a net income of $(68,630). 
2 
 Where an S corporation's income is exclusively from a trade or business, CIS considers net income to be the 
figure for ordinary income, shown on line 21 of page one of the petitioner's Form 1120s. The instructions on 
the Form 1 120s U.S. Income Tax Return for an S Corporation state on page one, "Caution: Include only trade 
or business income and expenses on lines 1 a through 2 1 ." 
Where an S corporation has income from sources other than from a trade or business, net income is found on 
Schedule K. The Schedule K form related to the Form 1120s states that an S corporation's total income from 
its various sources are to be shown not on page one of the Form 1120S, but on line 23 of the Schedule K, 
Shareholders' Shares of Income, Credits, Deductions, etc. See Internal Revenue Service, Instructions for 
Form 1 120s (2003), available at http://www.irs.gov/pub/irs-priorli 1 120s--200 pd Instructions for Fonn 
1 120s (2002)' available at http://www.irs.gov/pub/irs-priorli 1 120s--2002.pdf. 
In 2003, the Form 1120s stated a net income of $(76,927). 
Therefore, for the years 2001 through 2003, the petitioner did not have sufficient net income to pay the 
difference between wages actually paid to the beneficiary and the proffered wage in each of these years. 
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. We reject, however, the idea the petitioner's total assets should have been 
considered in the determination of the ability to pay the proffered wage. On appeal counsel takes the total 
assets from the petitioner's tax return schedule L and balance sheets3 as current assets to argue that the 
petitioner had net current assets exceeding the proffered wage. Counsel's reliance on total assets in 
determining the petitioner's ability to pay the proffered wage is misplaced. 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 
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. 
The petitioner's net current assets during 2001 were $(67,792). 
The petitioner's net current assets during 2002 were $(138,039). 
The petitioner's net current assets during 2003 were $(177,532). 
Therefore, for the years 2001 through 2003, the petitioner did not have sufficient net current assets to pay the 
difference between wages actually paid to the beneficiary and the proffered wage. 
The record contains the petitioner's balance sheets for the years 2001 through 2004. On appeal counsel 
asserts that the balance sheets reflect sufficient net assets for the petitioner to pay the proffered wage. 
3 
 In the brief accompanying the instant appeal counsel claims that: "[pllease note the following current assets 
on the 1120s forms filed by the petitioner: 
Year 
200 1 
2002 
2003 
Current Assets 
$17 1,749.00 
$15 1,722.00 
$157,787.00 
However, the schedule L of the petitioner's tax returns show that these figures were reported as total assets 
instead of current assets. 
4 
According to Barron 's Dictionary of Accounting Terms 117 (3" 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. 
However, again counsel mistakenly considers the total assets as current assets. As discussed above, the AAO 
will not consider the petitioner's total assets in the determination of the ability to pay the proffered wage. In 
addition, these balance sheets are not audited. Counsel's reliance on unaudited financial records is misplaced. 
The regulation at 8 C.F.R. tj 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. As there is no 
accountant's report accompanying these statements, the AAO cannot conclude that they are audited 
statements. 
 Unaudited financial statements are the representations of management. 
 The unsupported 
representations of management are not reliable evidence and are insufficient to demonstrate the ability to pay 
the proffered wage. 
The petitioner submitted bank statements for its bank account. Counsel's reliance on the balance in the 
petitioner's bank account 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. Wle 
tlus regulation allows additional material "in appropriate cases," the petitioner in ths case has not demonstrated 
why the documentation specified at 8 C.F.R. fj 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 gven 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 was considered in determining the petitioner's net current assets. 
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 continuing ability to pay the beneficiary the proffered wage as of 
the priority date in 2001 to 2003 through an examination of wages paid to the beneficiary, its net income or its 
net current assets. 
Counsel cites Matter of Sonegawa, 12 I&N Dec. 612 (BIA 1967) to argue that CIS must use a totality of 
circumstances test in its review of the financial documents of the petitioner. Matter of Sonegawa 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 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. 
No unusual circumstances have been shown to exist in this case to parallel those in Sonegawa, nor has it been 
established that 2001 through 2003 were uncharacteristically unprofitable three years for the petitioner in a 
framework of profitable or successful years. 
Counsel refers to a decision issued by the AAO concerning the consideration of the normal accounting practices 
of the company in determining the ability to pay, 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 1 03.9(a). 
The record also contains financial documents for 
 In response to the director's 
request for evidence (RFE) counsel asserted that 
 is a wholly owned subsidiary of the petitioner, 
the owner of the petitioner also owns 100% 
 , and thus the petitioner could establish its 
wage with assets of 
 shows that each of the 
is structured as a corporation. Contrary to counsel's assertion, CIS may not 
look to the assets of the corporation's owner to satisfy the corporation's ability 
to pay the proffered wage. It is an elementary rule that a corporation is a separate and distinct legal entity 
from its owners and shareholders. See Matter of M, 8 I&N Dec. 24 (BIA 1958), Matter of Aphrodite 
Investments, Ltd., 17 I&N Dec. 530 (Comrn. 1980), and Matter of Tessel, 17 I&N Dec. 63 1 (Act. Assoc. 
Comm. 1980). Consequently, 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. Therefore, in the 
instant case the AAO concurs with the director's decision that the etitioner cannot establish its ability to pay 
the proffered wage with any assets of its shareholders, assets of h, or assets of the shareholders in 
any other businesses. 
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 fkom the day 
the Form ETA 750 was accepted for processing by the Department of Labor to 2003. The evidence submitted 
does not establish that the petitioner had the continuing ability to pay the proffered wage beginning on the 
priority date to 2003. 
The burden of proof in these proceedings rests solely with the petitioner. Section 291 of the Act, 8 U.S.C. 
$ 136 1. The petitioner has not met that burden. 
ORDER: The appeal is dismissed.