dismissed EB-3 Case: Network Engineering

C COPY 
U.S. Department of Homeland Security 
20 Mass. Ave., N.W., Rm. A3042 
Washington, DC 20529 
U. S. Citizenship 
and Immigration 
PETITION: 
 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. 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 
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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 a HW & SW development and consulting services firm. It seeks to employ the beneficiary 
permanently in the United States as a senior network engineer. As required by statute, a Form ETA 750, 
Application for Alien Employment Certification approved by the Department of Labor, 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. 
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 this decision. Further 
elaboration of the procedural history will be made only as necessary. 
As set forth in the director's October 18, 2004 denial, 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 or seasonal 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 at 8 C.F.R. 3 204.5(g)(2) states: 
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 either in the 
form of copies of annual reports, federal tax returns, or audited financial statements. In a case 
where the prospective United States employer employs 100 or more workers, the director 
may accept a statement from a financial officer of the organization which establishes the 
prospective employer's ability to pay the proffered wage. In appropriate cases, additional 
evidence, such as profitfloss statements, bank account records, or personnel records, may be 
submitted by the petitioner or requested by [Citizenship and Immigration Services (CIS)]. 
The petitioner must demonstrate the continuing ability to pay the proffered wage beginning on the petition's 
priority date, which is the date the Form ETA 750 was accepted for processing by any office within the 
employment system of the Department of Labor. See 8 C.F.R. 5 204.5(d). The priority date in the instant 
petition is April 30,2001. The proffered wage as stated on the Form ETA 750 is $58,800.00 annually. 
' The I-290B was originally received on November 9, 2004. A copy of the petitioner's denial notice, which the director 
requested, was received on November 19, 2004. The director then issued a letter on November 22, 2004 instructing the 
petitioner to submit this appeal to the Dallas District Office. Counsel, in a letter dated December 20, 2004, correctly 
notes that the original filing was timely and the director erred in returning the appeal to the petitioner. 
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 appeal2. Evidence submitted 
on appeal includes language from an AAO decision and copies of evidence already in the record. Other relevant 
evidence in the record includes copies of the petitioner's Form 1120s U.S. Income Tax Returns for an S 
Corporation for 2001,2002, and 2003, and the petitioner's bank statements in 2002. The record does not contain 
any other evidence relevant to the petitioner's ability to pay the proffered wage. 
Counsel states on appeal that the petitioner has established its ability to pay the proffered wage in 2001 because 
the combination of the petitioner's net income and net assets is greater than the prorated proffered wage, and the 
petitioner has clearly shown its ability to pay the proffered wage in 2002 and 2003 because the petitioner's net 
income is greater than the proffered wage in 2002 and the combination of the petitioner's net income and net 
assets is greater than the proffered wage in 2003. 
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 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. Cornrn. 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&N Dec. 
612 (Reg. Comm. 1967). 
In determining the petitioner's ability to pay the proffered wage, CIS will first examine whether the petitioner 
employed the beneficiary at the time the priority date was established. If the petitioner establishes by 
documentary evidence that it employed the beneficiary at a salary equal to or greater than the proffered wage, 
this evidence will be considered prima facie proof of the petitioner's ability to pay the proffered wage. In the 
instant case, on the Form ETA 750B, signed by the beneficiary on March 31,2001, the beneficiary did not claim 
to have worked for the petitioner. 
As another means of determining the petitioner's ability to pay the proffered wage, CIS will next examine the 
petitioner's net income figure as reflected on the petitioner's federal income tax return for a given year, 
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 COT. v. Sava, 632 F. Supp. 1049, 1054 (S.D.N.Y. 1986) (citing Tongatapu Woodcraft Hawaii, Ltd. v. 
Feldman, 736 F.2d 1305 (9" Cir. 1984)); see also Chi-Feng Chang v. Thornburgh, 719 F. Supp. 532 (N.D. Tex. 
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 (7" Cir. 1983). In K.C.P. Food Co., Inc., 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. 623 F. Supp. at 1084. The 
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). 
Page 4 
court specifically rejected the argument that the Service should have considered income before expenses were 
paid rather than net income. Finally, there is no precedent that would allow the petitioner to "add back to net cash 
the depreciation expense charged for the year." See Elatos Restaurant Corp., 632 F. Supp. at 1054. 
The evidence indicates that the petitioner is an S corporation. The record contains copies of the petitioner's Form 
1120s U.S. Income Tax Returns for an S Corporation for 2001, 2002, and 2003. The record before the director 
closed on October 12,2004 with the receipt by the director of the petitioner's submissions in response to the RFE. 
As of that date the petitioner's federal tax return for 2004 was not yet due. Therefore the petitioner's tax return 
for 2003 is the most recent return available. 
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. Where an S 
corporation has income from sources other than from a trade or business, that income is reported on Schedule K. 
Where the Schedule K has relevant entries for either additional income or additional deductions, net income is 
found on line 23 of the Schedule K. 
The petitioner's tax returns show the amounts for taxable income on line 23 of the Schedule K as shown in the 
table below. 
Tax Wage increase needed Surplus or 
year Net income to pay the proffered wage deficit 
* The full proffered wage, since the record contains no evidence of any wage 
payments made by the petitioner to the beneficiary in those years. 
The above information is insufficient to establish the petitioner's ability to pay the proffered wage in 2001 and 
2003. 
As an alternative means of determining the petitioner's ability to pay the proffered wage, CIS may review the 
petitioner's net current assets. Net current assets are a corporate taxpayer's current assets less its current 
liabilities. Current assets include cash on hand, inventories, and receivables expected to be converted to cash 
within one year. A corporation's current assets are shown on Schedule L, lines 1 through 6. Its current 
liabilities are shown on lines 16 through 18. If a corporation's net current assets are equal to or greater than 
the proffered wage, the petitioner is expected to be able to pay the proffered wage out of those net current 
assets. The net current assets are expected to be converted to cash as the proffered wage becomes due. Thus, 
the difference between current assets and current liabilities is the net current assets figure, which if greater 
than the proffered wage, evidences the petitioner's ability to pay. 
Page 3 is missing from both copies of the petitioner's 1120s U.S. Income Tax Return for an S Corporation for 2002, and 
line 23 of the Schedule K is on that page. Line 23 of the Schedule K is also listed on the Schedule M-I, and because it is 
listed as $0.00, the AAO will consider the petitioner's net income for 2002 to be the figure for ordinary income, shown on 
line 21 of page one of the petitioner's Form 1120s. 
Page 5 
Calculations based on the Schedule L's attached to the petitioner's tax returns yield the amounts for net 
current assets as shown in the following table. 
Tax Net Current Assets Wage increase needed 
year End of year to pay the proffered wage 
* The full proffered wage, since the record contains no evidence of any wage 
payments made by the petitioner to the beneficiary in those years. 
The above information is insufficient to establish the petitioner's ability to pay the proffered wage in 2001. 
Counsel states that "[fJor the year 2001, the petitioner must demonstrate the ability to pay the prorated proffered 
wage of $39,200.00." Counsel is, in essence, requesting that CIS prorate the proffered wage for the portion of 
the year that occurred after the priority date. CIS will not, however, consider 12 months of income towards 
an ability to pay a lesser period of the proffered wage any more than we would consider 24 months of income 
towards paying the annual proffered wage. While CIS will prorate the proffered wage if the record contains 
evidence of net income or payment of the beneficiary's wages specifically covering the portion of the year 
that occurred after the priority date (and only that period), such as monthly income statements or pay stubs, 
the petitioner has not submitted such evidence. 
Counsel also states that for 2001, "[tlhe petitioner's net income is $31,214.00 and the net assets are 
$42,408.00. Thus, the net income combined with the net assets is $73,622.00, which is clearly greater than 
either the prorated proffered wage of $39,200.00 or even the annual proffered wage." Counsel is referring to 
the petitioner's net current assets when stating net assets. 
As stated above, where an S corporation has income from sources other than from a trade or business, that income 
is reported on Schedule K. Where the Schedule K has relevant entries for either additional income or additional 
deductions, net income is found on line 23 of the Schedule K. Thus, the petitioner's net income for 2001 is not 
$3 1,214.00, as shown on line 21 of page one of the petitioner's Form 1120s. Rather, the petitioner's net income 
for 2001 is $16,668.00. This decision would not be different if the $31,214.00 figure were used. 
Moreover, the approach of combining the petitioner's net income with its net current assets to demonstrate the 
petitioner's ability to pay the proffered wage is unacceptable because net income and net current assets are 
not, in the view of the AAO, cumulative. The AAO views net income and net current assets as two different 
methods of demonstrating the petitioner's ability to pay the wage--one retrospective and one prospective. Net 
income is retrospective in nature because it represents the sum of income remaining after all expenses were 
paid over the course of the previous tax year. Conversely, the net current assets figure is a prospective 
"snapshot" of the net total of petitioner's assets that will become cash within a relatively short period of time 
minus those expenses that will come due within that same period of time. Thus, the petitioner is expected to 
receive roughly one-twelfth of its net current assets during each month of the coming year. Given that net 
income is retrospective and net current assets are prospective in nature, the AAO does not agree with counsel 
Page 6 
that the two figures can be combined in a meaningful way to illustrate the petitioner's ability to pay the 
proffered wage during a single tax year. Moreover, combining the net income and net current assets could 
double-count certain figures, such as cash on hand and, in the case of a taxpayer such as the petitioner in this 
case who reports taxes pursuant to accrual convention, accounts receivable. 
Counsel likewise states that the director erred in "including line 19 of [the] Schedule L in [her] calculations [of 
the petitioner's net current assets for 20011.'' Current liabilities, as noted by counsel and as stated above, are 
shown on lines 16 through 18 of the Schedule L. Thus, AAO does not include line 19 of the Schedule L when 
calculating the petitioner's net current assets. 
Counsel also states that petitioner has the ability to pay the proffered wage in 2002 because the petitioner's net 
income is greater than the proffered wage, and the petitioner has the ability to pay the proffered wage in 2003 
because "the net income combined with the net assets is $105,394.00, which is clearly greater than the annual 
proffered wage." As stated above, the approach of combining the petitioner's net income with its net current 
assets to demonstrate the petitioner's ability to pay the proffered wage is unacceptable. The petitioner, 
however, has established its ability to pay the proffered wage in 2002 and 2003, as shown above. 
The record contains the petitioner's bank statements. First, bank statements are not among the three types of 
evidence, enumerated in 8 C.F.R. $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 
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 the AAO has already considered in determining the petitioner's net 
current assets. Moreover, the record contains the petitioner's bank statements from 2002, and the petitioner has 
already established its ability to pay the proffered wage in 2002 with its federal tax return for 2002. 
After a review of the evidence, it is concluded that the petitioner has not established its ability to pay the 
salary offered as of the priority date of the petition and continuing until the beneficiary obtains lawful 
permanent residence. The decision of the director to deny the petition was correct, based on the evidence in 
the record before the director. 
For the reasons discussed above, the assertions of counsel on appeal and the evidence submitted on appeal fail 
to overcome the decision of the director. 
The burden of proof in these proceedings rests solely with the petitioner. Section 291 of the Act, 8 U.S.C. $ 1361. 
The petitioner has not met that burden. 
ORDER. The appeal is dismissed.