dismissed EB-3 Case: Landscaping

U.S. Citizenship 
and Immigration 
Services 
MATTER OF T-&C-L-, INC. 
APPEAL OF TEXAS SERVICE CENTER DECISION 
Non-Precedent Decision of the 
Administrative Appeals Office 
DATE: MAY I I, 20 I 8 
PETITION: FORM I-140,!MM!GRANT PETITION FOR ALIEN WORKER 
The Petitioner, a provider of grounds maintenance and landscaping services, seeks to employ the 
Beneficiary as a tree surgeon. It requests his classification under the third-preference, immigrant 
category as a skilled worker. Immigration and Nationality Act (the Act) section 203(b)(3)(A)(i), 
8 U.S.C. ~ I I 53(b)(3)(A)(i). This employment-based, "EB-3" category allows a U.S. business to 
sponsor a foreign national with at least two years of training or experience for lawful permanent 
resident status. 
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 proffered wage. 
On appeal, the Petitioner submits additional evidence and asserts that the Director did not properly 
consider its net income. 
Upon de novo review, we will dismiss the appeal. 
I. EMPLOYMENT-BASED IMMIGRATION 
Employment-based immigration generally follows a three-step process. To permanently till a 
position in the United States with a foreign worker, an employer must first obtain certification from 
the U.S. Department of Labor (DOL). See section 212(a)(S)(A)(i) of the Act, 8 U.S.C . 
. § I I 82(a)(5)(A)(i). DOL approval signifies that insufficient U.S. workers are able, willing, qualified, 
and available for a position, and that employment of a foreign national will not ham1 wages and 
working conditions of U.S. workers with similar jobs. !d. 
If the DOL certifies a position, an employer must next submit the eertitication with an immigrant 
visa petition to· U.S. Citizenship and Immigration Services (USClS). See section 204 of the Act, 
8 U .S.C. ~ I I 54. Among other things, USC IS considers whether a beneficiary meets the minimum 
requirements of a certified position and whether a petitioner can pay a proffered wage. If USC IS 
approves a petition. a foreign national may finally 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. 
Mal/er oll~&C-L-. Inc. 
II. ABILITY TO PAY THE PROFFERED WAGE 
A petitioner must demonstrate its continuing ability to pay a proffered wage, tfom a petltton's 
priority date u;1til a beneficiary obtains lawful permanent residence. 1 8 C.F.R. § 204.5(g)(2). 
Evidence of abili_ty to pay must include copies of annual reports, federal income tax returns, or 
audited financial statements. !d. 
Here, the accompanying labor certification states the proffered wage of the alTered position of tree 
surgeon as $42,266 a year. As of the appeal's filing, required evidence of the Petitioner's ability to 
pay in 2017 was not yet available. We therefore consider the company's ability to pay in only 2015 
and2016. 
In determining ability to pay, USClS examines whether a petitioner paid a beneficiary a full proffered 
wage each year from a petition's priority date. If a petitioner did not annually pay a full wage, 
USC IS considers whether it generated annual amounts of net incorrie or net current ass'ets sutTicient 
to pay any difference between a 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. See Maller olSonegawa. 12 I&N Dec. 612 (Reg'! Comm'r 1967) 2 
The Petitioner provided copies of IRS Forms W-2, Wage and Tax Statements, indicating that it paid 
the Beneficiary $28,938.23 in 2015 and $34,031.63 in 2016. Neither of these amounts equals or 
exceeds the annual proffered wage of $42,266. Based solely on the Petitioner's payments to the 
Beneficiary, the record therefore does not establish its ability to pay. Nevertheless, we credit the 
Petitioner's payments to the Beneficiary. It need only establish its ability to pay the annual 
differences between the profTered wages and the wages paid, or $13,327.77 in 2015 and $8,234.37 in 
2016. 
As of the Director's decision, the record contained copies of the Petitioner's federal income tax 
return for only 2015. The Director found that the tax return for that year reflects negative amounts 
of net income and net current assets. Negative amounts are obviously insufficient to cover the 
annual difference between the proffered wage and wages paid. The Director therefore concluded 
that the Petitioner did not establish its ability to pay the proffered wage in 2015. 
On appeaL the Petitioner contends that the Director erred in identifying its net income as the 
"income/loss reconciliation" figure on Schedule K of its IRS Form 1120S, U.S. Income Tax Return 
for an S Corporation. Rather. the Petitioner asserts that the Director should have considered the 
"ordinary business income" figure on line 21 of the return. The ordinary income figure rellects a 
1 
This petition's priority date is September 30, 2015, the date the DOL accepted the accompanying labor certification 
application for processing. See 8 C.F.R. § 204.5(d) (explaining how to determine a petition's priority date). 
2 Federal courts have upheld USC IS' method of determining a petitioner's ability to pay a proffered wage. See. e.g .. 
River St. Donuls, LLC v. Napolilano, 558 F.3d Ill. 118 (I st Cir. 2009). 
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Maller ofT-&C-L-. Inc. 
profit of $125.743. which exceeds the $13,327.77 difference between the proffered wage and wages 
paid in 2015. 
In determining net incomes of S corporations, ordinary incomes listed on IRS Fonns 1120S are not 
always accurate ligures. An ordinary income amount reflects only profits or losses from an S 
corporation's trade or business. IRS, "Instructions for Fonn 1120S" II, https://www.irs.gov/pub/irs­
·pdti'i 1120s.pdf (last visited Apr. 30, 2018). If an S corporation had additional sources of income, or 
other deductions or credits, it must report them on Schedule K, which summarizes shareholders' 
portions of the company's income, deductions, and credits. ld at 18. Thus, income/loss reconciliation 
figures on Schedules K more accurately reflect net incomes of someS corporations. 
The Petitioner asserts that USCIS' use of its reconciled amount on Schedule K violates Agency policy. 
The Petitioner notes that USCIS has stated that a petitioner demonstrates its ability to pay if its "net 
income" equals or exceeds a proffered wage. Memorandum from William R. Yates, Assoc. Dir. of 
Ops., USCIS, HQOPRD 90/16.45, Determination of Ability to Pay under 8 CFR. 204.5(g)(2) 2 (May 
4, 2004 ), https:l/www.uscis.gov/ sites/default/fi les/fi les/nati vedocuments/abi lit)10pay _ 4may04. pdf (last 
visited Apr. 30, 2018) By referencing the Petitioner's reconciled income figure on Schedule K, 
however. USCIS docs not abandon the net income test. Rather, as discussed above, USCIS merely 
refers to a figure that more accurately reflects the Petitioner's net income. 
The Petitioner's 2015 tax returns reflect ordinary business income of more than $125,000. But its 
Schedule K includes a depreciation deduction of more than $126,000. The deduction allows the 
Petitioner to subtract the cost of certain vehicles and equipment it bought for use in its business. See 
26 U.S.C § 179. Because wear and tear will decrease the equipment's value over time, the depreciation 
deduction represents real business costs that we must consider in detem1ining the Petitioner's ability to 
pay. See. e.g. Ril•er St. Donuts, 558 F.3d at 118 (holding that USCIS rationally explained its policy of 
excluding depreciation from net income). We therefore reject the Petitioner's argument that use of its 
reconciled income figure on Schedule K violates USCIS policy. 
On appeal, the Petitioner also submits copies of its federal income tax retums for 2016. These retums 
reflect a negative atnount of net current assets that does not establish its ability to pay. The returns also 
reflect ordinary business income of $71,503. But, like the 2015 retums, the 20!6 returns indicate a 
large depreciation deduction. The resulting, reconciled income amount is less than the difference 
between the proffered wage and wages paid. Thus, based on examinations of the Petitioner's wage 
payments and amounts of net income and net current assets, the record docs not establish its ability 
to pay the proffered wage in 2015 or 2016. 
As previously indicated. in determining a petitioner's ability to pay, we may consider factors other 
than the amounts of its wage payments, net income, and net current assets. Under Sonegawa, we 
may consider: the number of years a petitioner has conducted business; its number of employees; 
the growth of its business; its incurrence of uncharacteristic losses or expenses; its reputation in its 
industry; a beneficiary's replacement of a current employee or outsourccd service; or other evidence 
of a petitioner's ability to pay a proffered wage. Matter of'Sonegawa, 12 l&N Dec. at 614-15. 
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Mol/er oll~&C-L-. Inc. 
Here, the record indicates the Petitioner's continuous business operations since 1989 and its 
employment of 56 people. Its tax returns tor 2015 and 2016 reflect growing annual amounts of 
revenues and wages paid, but do not demonstrate its ability to pay the proffered wage in either 2015 or 
2016. Moreover, unlike the petitioner is Sonegawa. the Petitioner here has not submitted financial 
documentation to establish a historical pattern of growth, nor has the Petitioner demonstrated its 
incurrence of uncharacteristic losses or expenses. In addition, the record does not indicate the 
Bcneliciary's replacement of a current employee or outsourced service. Thus, a totality of 
circumstances under Sonegall'a docs not establish the Petitioner's ability to pay the protTered wage. 
III. CONCLUSION 
The record on appeal docs not establish the Petitioner's continuing ability to pay the proffered wage 
from the petition's priority date onward. We will therefore affirm the Director's decision . 
.) 
ORDER: The appeal is dismissed. 
Cite as /vfaller ojT&C-L-. Inc., ID# 128773 7 (AAO May II, 2018) 
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