dismissed EB-3 Case: Instrument Restoration

& 
i&ntE@ing data FdettedlD 
prevent cl~~imij 4- . - ;ranted 
invasion of personal pnv~cy 
U.S. Department of Homeland Security 
20 Mass Ave., N.W., Rm. 3000 
Washington, DC 20529 
PETITION: 
 Immigrant Petition for Alien Worker as an Other, Unskilled Worker Pursuant to Section 
203(b)(3) of the Immigration and Nationality Act, 8 U.S.C. 9 1153(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 
F 
Page 2 
OISCUSSION: The preference visa petition was denied by the Director, Nebraska Service Center, and is now 
before the Administrative Appeals Offrce (AAO) on appeal. The appeal will be dismissed. 
The petitioner is a vintage instruments restoration firm. It seeks to employ the beneficiary permanently in the 
United States as a piano technician. As required by statute, a Form ETA 750, Application for Alien Employment 
Certification approved by the Department of Labor POL), 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 additional evidence and asserts that the petitioner has demonstrated its ability to pay 
the proffered wage. 
Section 203(b)(3)(A)(iii) of the Immigration and Nationality Act (the Act), 8 U.S.C. 4 1153@)(3)(A)(iii), provides for 
the granting of preference classification to other 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. 4 204.5(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, 
the day the Form ETA 750 was accepted for processing by any office within DOL's employment system. See 8 
CFR 4 204.5(d). Here, the Form ETA 750 was accepted for processing on October 15,2003. The proffered wage 
as stated on the Form ETA 750 is $15.30 per hour, which amounts to $3 1,824 annually. The ETA 750B, signed 
by the alien beneficiary on September 23,2003, does not indicate that the alien has worked for the petitioner. 
On Part 5 of the visa petition, filed on December 28, 2005, it is claimed that the petitioner was established in 
1989, has a gross annual income of $5 19,015 and currently employs eight workers. 
As evidence of its continuing financial ability to pay the certified wage of $31,824 per year, the petitioner 
provided copies of its Form 1120S, U.S. Income Tax Return for an S Corporation for 2002,2003 and 2004. They 
indicate that the petitioner uses a standard calendar year to file its taxes. The returns contain the following 
information: 
Ordinary ~ncome' -$ 37,018 -$ 156 $ 16,745 
Current Assets (Sched. L) $ 100,007 $ 95,660 $ 42,586 
Current Liabilities (Sched. L) $ 147,467 $ 175,246 $ 115,373 
Net Current Assets -$ 47,460 -$ 79,586 -$ 72,787 
Besides net income and as an alternative method of reviewing a petitioner's ability to pay a proposed wage, 
Citizenship and Immigration Services (CIS) will examine a petitioner's net current assets. Net current assets are 
the difference between the petitioner's cmt assets and current ~iabilities.~ It represents a measure of liquidity 
during a given period and a possible resource out of which the proffered wage may be paid for that period. A 
corporate petitioner's year-end current assets and current liabilities are shown on Schedule L of its federal tax 
return. Here, current assets are shown on line(s) 1 through 6 and current liabilities are shown on line(s) 16 
through 18. If a corporation's end-of-year net current assets are equal to or greater than the proffered wage, the 
corporate petitioner is expected to be able to pay the proffered wage out of those net current assets. It is noted 
that as the priority date is in 2003, the 2003 and 2004 tax returns are more relevant that the 2002 return in 
determining the petitioner's continuing ability to pay the certified wage beginning on the priority date. 
The director denied the petition on March 22, 2006, concluding that the petitioner had failed to establish its 
continuing ability to pay the proffered wage based on the corporate tax returns showing that neither its net current 
assets nbr its ordinary income for the years offered demonstrated that it had the ability to pay the proffered wage.3 
On appeal, counsel resubmits copies of the petitioner's 2002, 2003, and 2004 federal tax returns. He also 
provides a copy of the petitioner's 2005 corporate tax return. It contains the following: 
Ordinary Income -$14,961 
Current Assets $57,507 
Current Liabilities $60,065 
Net Current Assets -$2,558 
Counsel additionally provides on appeal a copy of the sole shareholder's individual income tax return for 2005, 
which shows an adjusted gross income of $85,493 for the sole shareholder, his spouse and three dependents. 
Counsel asserts that the evidence submitted supports the petitioner's ability to pay the certified wage because the 
owner could have opted to take less in officer compensation or opted to take less depreciation for items purchased 
and already paid for, thus showing a higher ordinary income on the tax return, but made such decisions, in part, in 
order to reduce taxable income. Counsel also asserts that the company is virtually debt fiee, owns significant 
 or the purpose of this review, ordinary income will be treated as net income. 
2 
According to Bawon 3 Dictionary of Accounting Terms 117 (3d 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 as accounts payable, 
short-term notes payable, and accrued expenses (such as taxes and salaries). Id. at 1 18. 
3 
 Although the director erred in his calculation of net current assets, his conclusion that net current assets did not 
cover the proffered wage in 2002,2003, and 2004 are also supported by our figures set forth above. 
Page 4 
assets and pays out significant amounts of salaries each year. He contends that the business has met its expenses 
and been profitable for many years and that should the beneficiary be hired, either he would generate additional 
revenue or the owner would take less. Counsel also states that the company has hired outside help to provide 
some of the beneficiary's proposed services. 
Counsel's assertions are not persuasive. Regardless of any tax avoidance strategy in selecting the corporate 
structure, it remains that the petitioner and named employer on the 1-140, Immigrant Petition for Alien Worker is 
a corporation and must establish its own continuing ability to pay the proffered salary. In this case, CIS does not 
find persuasive the assertion that the officer compensation presented on the petitioner's tax returns should be 
automatically added back to the corporate petitioner's income. It is observed that officer compensation of 
$16,900, $40,000, and $52,000 was expensed as officer's compensation in 2003, 2004, and 2005, respectively. 
Such compensation is paid to individuals who materially participate in a business. Many of the duties performed 
by the officer(s) are not the same as those to be performed by the beneficiary and as such, the compensation 
would not be considered to be an available source with which to pay the beneficiary. There is also no first-hand 
evidence from the officer that such compensation could have been foregone during the period given.4 
Counsel cites no legal authority in support of his position that the value of a shareholder's individually held assets 
may be considered when evaluating a corporate petitioner's ability to pay the proffered wage. It is well settled 
that a corporation is a distinct legal entity from its owners or individual shareholders: 
The corporate personality is a fiction but it is intended to be acted upon as though it were a 
fact. A corporation is a separate legal entity, distinct from its individual members or 
stockholders. 
The basic purpose of incorporation is to create a distinct legal entity, with legal rights, 
obligations, powers, and privileges different from those of the natural individuals who created 
it, own it, or whom it employs. 
A corporate owner/employee, who is a natural person, is distinct, therefore, from the 
corporation itself. An employee and the corporation for which the employee works are 
different persons, even where the employee is the corporation's sole owner. Likewise, a 
corporation and its stockholders are not one and the same, even though the number of 
stockholders is one person or even though a stockholder may own the majority of the stock. 
The corporation also remains unchanged and unaffected in its identity by changes in its 
individual membership. 
The suggestion that the beneficiary would be assuming a portion of this officer's compensation and that such 
compensation would be considered available to pay the proffered wage is not documented. Aside from the 2005 
individual tax return of the sole shareholder, which shows that his adjusted gross income would have to be reduced 
by almost 40% to cover the proffered wage, there is no other credible documentation supporting such a theory. 
Also, there is no notarized, sworn statement from the petitioner in the record which attests to the claim that the 
beneficiary would assume this officer's duties. Going on record without supporting documentary evidence is not 
suficient 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)). 
In no legal sense can the business of a corporation be said to be that of its individual 
stockholders or oficers. 18 Am. Jur. 2d Corporations 4 44 (1985). 
The court in Sitar v. Ashcroft, 2003 WL 22203713 @.Mass. Sept. 18,2003) also considered whether the personal 
assets of one of a corporate petitioner's directors should be included in the examination of the petitioner's ability 
to pay the proffered wage. The petitioner in that case was a closely held family business organized as a 
corporation. In rejecting consideration of such individual assets, the court stated, "nothing in the governing 
regulation, 8 C.F.R. $ 204.5, permits [CIS] to consider the financial resources of individuals or entities who have 
no legal obligation to pay the wage." 
It is further noted that counsel's assertion that the petitioner has hired others to provide some of the services that 
the beneficiary would perform is not supported by any first-hand documentation and does not therefore, constitute 
evidence on this issue. See Matter ofobaigbena, 19 I&N Dec. 533,534 (BIA 1988). 
In determining the petitioner's ability to pay the proffered wage during a given period, CIS will first examine 
whether the petitioner may have 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. To the extent that the petitioner may have paid the alien less than the proffered wage, those amounts will 
be considered. If the difference between the amount of wages paid and the proffered wage can be covered by the 
petitioner's net income or net current assets for a given year, then the petitioner's ability to pay the full proffered 
wage for that period will also be demonstrated. As noted above, the record contains no evidence that the 
petitioner has employed 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 (or net current assets) 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. Texas 1989); K. C.P. Food Co., Inc. v. Sava, 623 F. Supp. 1080 (S.D.N.Y. 
1985). 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. 
Similarly, the fact that a petitioner may have paid other wages to other employees in a given year is not indicative 
of its ability to pay the proffered salary to a beneficiary. Also, the depreciation deduction will not be included or 
added back to the net income. This figure recognizes that the cost of a tangible asset may be taken as a deduction 
to represent the diminution in value due to the normal wear and tear of such assets as equipment or buildings or 
may represent the accumulation of funds necessary to replace perishable equipment and buildings. But the cost of 
equipment and buildings and the value lost as they deteriorate represents a real expense of doing business, 
whether it is spread over more years or concentrated into fewer. With regard to depreciation, the court in Chi- 
Feng Chang further noted: 
Plaintiffs also contend that 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. (Original emphasis.) Chi-Feng at 536. 
As set forth above, if an examination of the petitioner's net income or wages paid to the beneficiary fail to 
successfblly demonstrate an ability to pay the proposed wage offer, CIS will review a petitioner's net current 
assets as an alternative method of reviewing a petitioner's ability to pay the proffered salary because they 
represent cash or cash equivalent readily available resources. 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, a 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. We also do not concur with counsel's 
characterization of the petitioner as "debt free," as Schedule L of the tax retum(s) shows current liabilities of 
$175,246 in 2003, $1 15,373 in current liabilities in 2004, and $60,065 in current liabilities in 2005. 
In 2003, neither the petitioner's net income of 4156, nor its net current assets of -$79,586 were sufficient to pay 
the certified wage of $31,824 and demonstrate the petitioner's ability to pay in that year. Similarly, in 2004, 
neither the petitioner's net income of $16,745, nor its net current assets of -$72,787 were enough to cover the 
proposed wage offer. Finally, in 2004, neither the petitioner's net income of -$14,961, nor its net current assets of 
-$2,558 could cover the proffered salary. The regulation at 8 C.F.R. $ 204.5(g)(2) requires that a petitioner 
establish a continuing ability to pay the proffered wage beginning at the priority date. Upon review of the evidence 
contained in the record and submitted on appeal, the AAO concludes that the evidence failed to demonstrate that 
the petitioner has had the continuing ability to pay the proffered wage. 
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. 
The denial of ths petition is without prejudice to the filing of a new petition by the petitioner accompanied by the 
appropriate supporting evidence and fee. 
ORDER: The appeal is dismissed.