dismissed EB-3 Case: Machine Repair

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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 
Services 
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. 5 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. 
Administrative Appeals Office 
Page 2 
DISCUSSION: The preference visa petition was denied by the Director, Texas Service Center, and is now 
before the Administrative Appeals Office (AAO) on appeal. The appeal will be dismissed. 
The petitioner is an ice factory. It seeks to employ the beneficiary permanently in the United States as a 
maintenance machine repairer. As required by statute, the petition is accompanied by a Form ETA 750, 
Application for Alien Employment Certification, approved by the Department of Labor. 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 addition a1 evidence.' 
Section 203(b)(3)(A)(i) of the Immigration and Nationality Act (the Act), 8 U.S.C. 5 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 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. 
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 CFR 
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. 
Cornrn. 1977). 
Here, the Form ETA 750 was accepted on April 27, 2001. The proffered wage as stated on the Form ETA 
750 is $15.62 per hour ($32,489.60 per year). The Form ETA 750 states that the position requires four (4) 
years experience in the job offered. 
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. 5 103.2(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. 
Page 3 
The evidence in the record of proceeding shows that the petitioner is structured as an S corporation. On the 
petition, the petitioner claimed to have been established in 1999, to have a gross annual income of $1.3 
million, to have a net annual income of $90,000, and to currently employ 15 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 
by the beneficiary on April 28, 2001, the beneficiary claimed to have worked for the petitioner since January 
1998. 
With the petition, the petitioner submitted the following documents: its unaudited financial statements as of 
December 31,2002, and Form 1120s U.S. Income Tax Return for an S Corporation for 2001 and 2002. 
On August 24, 2004, because the director deemed the evidence submitted insufficient to demonstrate the 
petitioner's continuing ability to pay the proffered wage beginning on the priority date, the director issued a 
Notice of Intent to Deny (NOD). The director requested that the petitioner submit regulatory-prescribed 
evidence of the petitioner's ability to pay for 2003, and the beneficiary's W-2 forms for 2001 through 2003 
within 30 days. In response, the petitioner submitted its 2003 tax return and a letter from its CPA. 
The director denied the petition on October 15, 2004, finding that the evidence submitted with the petition 
and in response to the NOID did not establish that the petitioner had the continuing ability to pay the 
proffered wage for 2002 and 2003. 
On appeal, counsel asserts that a generally accepted accounting principle allows adding back to net cash the 
depreciation expenses and the income of the petitioner's sole stockholder demonstrates the petitioner's 
continuing ability to pay the proffered wage beginning on the priority date. 
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, counsel states in response to the NOD that 
the beneficiary has not worked for the petitioner because the beneficiary did not possess an employment 
authorization document. The record of proceeding does not contain the beneficiary's W-2 forms or any other 
documents showing the petitioner hired and paid the beneficiary any amount of compensation in the relevant 
years. Therefore, the petitioner has not established that it employed and paid the beneficiary the full proffered 
wage during the period from the priority date through 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), affd, 703 F.2d 571 (7th Cir. 1983). 
Counsel argues on appeal that the depreciation should be added back to cash in determining the petitioner's 
ability to pay the proffered wage. 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. 
Page 4 
In K. C. P. Food Co., Inc. v. Suva, 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 tax returns demonstrate the following financial information concerning the petitioner's ability to pay the 
proffered wage of $32,489.60 per year from the priority date. 
In 2001, the Form 1120s stated net income2 of $45,797. 
In 2002, the Form 1120s stated net income of $18,247. 
In 2003, the Form 1120s stated net income of $(46,101). 
Therefore, for the years 2002 through 2003, the petitioner did not have sufficient net income to pay the 
proffered wage while the petitioner established its ability to pay the proffered wage with its net income for 
2001. 
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 
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 
2 
 Ordinary income (loss) from trade or business activities as reported on Line 21. 
3~ccording to Barron's Dictionary of Accounting Tenns 117 (3rd 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. 
Page 5 
assets during the year in question, were $(74,749) in 2002 and $(315,858) in 2003. Therefore, the petitioner 
had insufficient net current assets in 2002 and 2003 to pay the proffered wage. 
The petitioner submitted its financial statements as of December 31, 2002. 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 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, 
the petitioner had not established that it had the continuing ability to pay the beneficiary the proffered wage 
for 2002 and 2003 through an examination of wages paid to the beneficiary, or its net income or net current 
assets. 
Counsel asserts in his brief accompanying the appeal that there is another way to determine the petitioner's 
ability to pay the proffered wage from the priority date. Counsel states that the petitioner's sole stockholder 
has income in the amount of $246,704 in 2002 and $121,123 in 2003, which can be used to pay the 
beneficiary the proffered wage. 
Contrary to counsel's assertion, CIS may not "pierce the corporate veil" and 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 19-58), Matter of Aphrodite Investments, Ltd., 17 I&N Dec. 530 (Comm. 1980), and Matter of 
Tessel, 17 I&N Dec. 631 (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. 
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 from the day 
the Form ETA 750 was accepted for processing by the Department of Labor. 
The evidence submitted does not establish that the petitioner had the continuing ability to pay the proffered 
wage beginning on the priority date. 
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. 
ORDER: The appeal is dismissed.