dismissed EB-3 Case: Martial Arts

identifying data deleted to 
prevent clearly unwarranted 
invasion of personal privacy 
U.S. Department of Homeland Security 
20 Mass. Ave., N.W., Rm. 3000 
Washington, DC 20529 
PUBLIC COPY 
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 11 53(b)(3) 
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. 
V 
Robert P. Wiemann, Chief 
Administrative Appeals Office 
DISCUSSION: The preference visa petition was denied by the Director, Nebraska Service Center, and is 
now before the Administrative Appeals Office (AAO) on appeal. The appeal will be dismissed. 
The petitioner is a martial arts academy. It seeks to employ the beneficiary1 permanently in the United States 
as a head instructor and researcher. As required by statute, the petition is accompanied by a Form ETA 750, 
Application for Alien Employment Certification, approved by the U. S. 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. 
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 denial dated August 25, 2005, the single 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 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. 
Section 203(b)(3)(A)(ii) of the Immigration and Nationality Act (the Act), 8 U.S.C. 5 1153(b)(3)(A)(ii), 
provides for granting preference classification to qualified immigrants who hold baccalaureate degrees and 
are members of the professions. 
The regulation at 8 C.F.R. 5 204.5(g)(2) states in pertinent part: 
Ability ofprospective 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. 
1 
 The instant petition is for a substituted beneficiary. An 1-140 petition for a substituted beneficiary retains 
the same priority date as the original ETA 750. Memo. from Luis G. Crocetti, Associate Commissioner, 
Immigration and Naturalization Service, to Regional Directors, et al., Immigration and Naturalization Service, 
Substitution of Labor Certzfication Beneficiaries, at 3, http://ows.doleta.gov/dmstree/fm/fm96/fm~28-96a.pdf 
(March 7, 1996). 
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. § 
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 10, 2001 .2 The proffered wage as stated on the Form ETA 
750 is $17.00 per hour ($35,360.00 per year). 
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 (2d 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 appeal.' 
Relevant evidence in the record includes copies of the following documents: the original Form ETA 750, 
Application for Alien Employment Certification, approved by the U.S. Department of Labor with a new Part 
B for the substitute beneficiary (who is the beneficiary herein); the petitioner's U.S. Internal Revenue Service 
Form 1 120 tax returns for 2000, 2001 and 2003 and a Form 1 120s tax return for 2004; five pages of the 
petitioner's bank statement dated May 3 1, 2005; reviewed combined financial statements for the petitioner 
and its affiliates for years ended December 3 1, 2003 and 2004; an explanatory letter from counsel dated June 
30, 2004; approximately 28 pages of non-audited financial statements; four Employer's Quarterly Federal Tax 
Returns Form 941, dated April 28, 2003, October 27, 2003, January 30, 2004 and July 3 1, 2004; six business 
banking statements dated October 3 1, 2003; and, documents concerning the beneficiary's qualifications as 
well as other documentation. 
Counsel's reliance on the balances in the petitioner's bank accounts is misplaced. First, bank statements are 
not among the three types of evidence, enumerated in 8 C.F.R. 5 204.5(g)(2), required to illustrate a petitioner's 
ability to pay a proffered wage. While this regulation allows additional material "in appropriate cases," the 
petitioner in this case has not demonstrated why the documentation specified at 8 C.F.R. 5 204.5(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 given 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 hnds 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 will be considered below in determining the 
petitioner's net current assets. 
It has been approximately five years since the Alien Employment Application has been accepted and the 
proffered wage established. According to the employer certification that is part of the application, ETA Form 
750 Part A, Section 23 b., states "The wage offered equals or exceeds the prevailing wage and I [the 
employer] guarantee that, if a labor certification is granted, the wage paid to the alien when the alien begins 
work will equal or exceed the prevailing wage which is applicable at the time the alien begins work." 
The submission of additional evidence on appeal is allowed by the instructions to the CIS 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 evidence in the record of proceeding shows that the petitioner was structured as a C corporation, then as a 
S corporation. On the petition, the petitioner claimed to have been established in 1973, and according to its 
tax returns, incorporated in May 1980. The petitioner elected S Corporation tax treatment on November 1, 
2004. At the time the petition was prepared, it employed 39 workers. According to the tax returns in the 
record, the petitioner's fiscal year is not based on a calendar year, but it reports its income for tax purposes 
from November lSt, to October 3 1'' of each year. On the Form ETA 750B, signed by the beneficiary on, the 
beneficiary did claim to have worked for the petitioner as well as on the CIS Form G-325A prepared by the 
beneficiary (as dated May 28, 2004). The beneficiary stated that he was employed by the petitioner as a 
martial arts instructor from October 2001 to the present time (i.e. May 28, 2004). 
On appeal, the petitioner asserts that it is submitting additional evidence, and that since the petitioner is one of 
six other affiliated companies under common ownership and management, that the income of the other six 
companies "is available to [the petitioner]." 
Accompanying the appeal, counsel submits an explanatory letter dated September 26, 2005 and additional 
evidence that includes copies of the following documents: reviewed combined financial statements for the 
petitioner and its affiliates for years ended December 31, 2003 and 2004; and, a letter dated September 23, 
2005, from Larry Petrick, controller of the "New Life Fitness World" corporate office. 
As a preface to the following discussion, contrary to counsel's assertion above stated, Citizenship and 
Immigration Services (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 
1958), 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. In a similar case, the court in Sitar v. Ashcroft, 2003 WL 22203713 (D.Mass. Sept. 18, 2003) stated, 
"nothing in the governing regulation, 8 C.F.R. 8 204.5, permits [CIS] to consider the financial resources of 
individuals or entities who have no legal obligation to pay the wage." Therefore, the AAO will not consider 
the assets of the petitioner's affiliates in the determination of the petitioner's ability to pay the proffered wage. 
On appeal, counsel submitted the financial statements of the petitioner and its affiliates for years ended 
December 31, 2003 and 2004. The regulation at 8 C.F.R. 
 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 that the financial statements of the business are free of material misstatements. The 
accountant's report that accompanied those financial statements makes clear that they are reviewed 
statements, as opposed to audited statements. The unaudited financial statements that counsel submitted with 
the petition are not persuasive evidence. Reviews are governed by the American Institute of Certified Public 
Accountants' Statement on Standards for Accounting and Review Services (SSARS) No.l., and accountants 
only express limited assurances in reviews. As the accountant's report makes clear, the financial statements 
are the representations of management and the accountant expresses no opinion pertinent to their accuracy. 
The unsupported representations of management are not reliable evidence and are insufficient to demonstrate 
the ability to pay 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 
Page 5 
offer remained realistic for each year thereafter, until the beneficiary obtains lawful 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. 
5 204.5(g)(2). In evaluating whether a job offer is realistic, 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&NDec. 612 (BIA 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 has not established that it employed and paid the beneficiary the full proffered 
wage from the priority date. Although the beneficiary claimed to have worked for the petitioner since 
October 200 1, the petitioner submitted no IRS forms W-2 or Form 1099-MISC to evidence wages paid to 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 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, 7 19 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), afd, 703 F.2d 571 (7th Cir. 1983). 
Reliance on the petitioner's gross sales and profits exceeded the proffered wage is misplaced. Showing that 
the petitioner's gross sales and profits exceeded the proffered wage is insufficient. Similarly, showing that 
the petitioner paid wages in excess of the proffered wage is insufficient. 
The tax returns demonstrate the following financial information concerning the petitioner's ability to pay: 
In 2000, the Form 1 120 stated net income4 of $4 17,320.00. 
In 2001, the Form 1 120 stated net income of $127,434.00. 
In2003,theForm1120statedalossof<$11,550.00.~5 
In 2004, the Form 1 120s6 stated a loss of <$73,942.00.>~ 
Since the proffered wage is $35,360.00 per year, in tax years 2000 and 2001, the petitioner did have sufficient 
income to pay the proffered wage. For years 2003 and 2004, the petitioner did not have the ability to pay the 
Taxable income before net operating loss deduction and special deductions as reported on Line 28 of the 
Form 1120. 
The symbols <a number> indicate a negative number, or in the context of a tax return or other financial 
statement, a loss. 
Internal Revenue Service Form 1 120S, line 2 1, Ordinary business income (loss) from trade or business 
activities. 
7 
 This office notes that the petitioner's 2004 tax return covers the period from November 1,2004 to December 
3 1,2004. 
proffered wage from an examination of its net income. Therefore from an examination of the petitioner's net 
income, it did not have the continuing ability to pay the proffered wage from 2003. No tax return nor other 
independent, objective evidence, acceptable under the regulation, was submitted by the petitioner for tax year 
2002. The burden of proof in these proceedings rests solely with the petitioner. Section 291 of the Act, 8 
U.S.C. $ 1361. 
If the net income the petitioner demonstrates it had available during the 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 and include cash-on-hand. 
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 2000, 2001, 2003 and 2004 were 
$91,487.00, <114,862.00>,<$118,223.00> and <$206,062.00>. 
Therefore, for years 2001, 2003 and 2004, the petitioner did not have sufficient net current assets to pay the 
proffered wage. 
Therefore, from the year 2002, the petitioner had not established that it had the continuing ability to pay the 
beneficiary the proffered wage as of the priority date through an examination of wages paid to the beneficiary, 
or its net income or net current assets. Although the petitioner declined to submitted probative evidence for 
year 2002, this did not excuse the petitioner from providing independent, objective and acceptable evidence of 
its ability to pay the proffered wage from that date. 
The evidence submitted fails to establish that the petitioner has 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. 
$ 136 1. The petitioner has not met that burden. 
ORDER: The appeal is dismissed. 
8 
According to Barron's Dictionary of Accounting Terms 1 17 (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 as accounts 
payable, short-term notes payable, and accrued expenses (such as taxes and salaries). Id. at 1 18.