dismissed EB-3 Case: Restaurant

PUBLIC COPY 
U.S. Department of Homeland Security 
20 Mass, N.W. Rrn. A3042 
Washington, DC 20529 
U.S. Citizenship 
and Immigration 
Services 
- - 
WAC 03 213 53844 
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. 
Robert P. Wiemann, Chief 
Administrative Appeals Office 
Page 2 
DISCUSSION: The preference visa petition was denied by the Director, California Service Center, and is 
now before the Administrative Appeals Office on appeal. The appeal will be dismissed. 
The petitioner is a restaurant and nightclub. It seeks to employ the beneficiary permanently in the United 
States as a cook. 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 petitioner was established in 1985, and, it employs 14 individuals. 
Section 203(b)(3)(A)(i) of the Immigration and Nationality Act (the Act), 8 U.S.C. 9 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 at 8 C.F.R. 9 204.5(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 regulation at 8 CFR 8 204.5(1)(3)(ii) states, in pertinent part: 
(A) General. Any requirements of training or experience for sllled workers, professionals, or 
other workers must be supported by letters from trainers or employers gving the name, address, 
and title of the trainer or employer, and a description of the training received or the experience of 
the alien. 
(B) Skilled workers. If the petition is for a sllled worker, the petition must be accompanied by 
evidence that the alien meets the educational, training or experience, and any other requirements 
of the individual labor certification, meets the requirements for Schedule A designation, or meets 
the requirements for the Labor Market Information Pilot Program occupation designation. The 
minimum requirements for this classification are at least two years of training or experience. 
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. 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). 
Page 3 
Here, the Form ETA 750 was accepted on August 22, 2000. The proffered wage as stated on the Form ETA 
750 is $12.16 per hour ($26,540.80 per year). The Form ETA 750 states that the position requires two years 
experience. 
On appeal, counsel submits a legal brief and additional evidence. 
With the petition, counsel submitted copies of the following documents: the original Form ETA 750, 
Application for Alien Employment Certification, approved by the U.S. Department of Labor; U.S. Internal 
Revenue Service Form tax returns for 2000, 2001, and 2002; and, copies of documentation concerning the 
beneficiary's qualifications as well as other documentation. 
Because the director determined the evidence submitted with the petition was insufficient to demonstrate the 
petitioner's continuing ability to pay the proffered wage beginning on the priority date, consistent with 8 
C.F.R. 5 204.5(g)(2), the director requested on May 3, 2004 pertinent evidence of the petitioner's ability to pay 
the proffered wage beginning on the priority date. The director requested federal tax returns with signatures, 
annual reports, audited financial statements for 2002 and 2003. The director requested profit/loss statements and 
balance sheets with any audited financial statements submitted. Also the director requested California 
Employment Development Department (EDD) Form DE-6, Quarterly Wage Reports for all employees for the last 
four quarters that were accepted by the State of California. The forms should include the names, social security 
numbers and number of weeks worked for all employees." 
In response to the request for evidence of the petitioner's ability to pay the proffered wage beginning on the 
priority date, petitioner submitted the petitioner's U.S. Internal Revenue Service (IRS) Form 1065 tax returns for 
years 2000, 2001, 2002 and 2003; Form 941 Employer's Quarterly Federal Tax Returns for 2003 and 2004; 
Worker's Compensation Insurance Payroll Reports; City of Santa Barbara Business Tax Certificates; a realty 
lease; Municipal Services fee bills; other permits and licenses; 25 photos of the business premises as well as other 
documents. 
The director denied the petition on August 9, 2004, finding that the evidence submitted did not establish that 
the petitioner had the continuing ability to pay the proffered wage beginning on the priority date. 
On avveal. counsel asserts that the director based its denial on the aetitioner's lack of evidence of its abilitv to 
A. , 
pay the proffered wage. Counsel contends that the beneficiary wiil replace "~ook' and,;he 
beneficiary's expertise in banquets and catering will increase revenues for the petitioner. The petitioner states 
in a letter dated December 17, 2004, that who was the ChefIKitchen Manager has departed as of 
March 200 1, and, his work has since been distributed through the last three years among "a number of hourly 
employees." 
Counsel has submitted the following documents to accompany the appeal statement and in follow-on letters to 
the AAO: an explanatory letter; page four of the petitioner U.S. federal tax return for year 2003; a payroll 
summary; a letter from a prior employer; and, a letter from a bank analysis showing employer's funds. 
In determining the petitioner's ability to pay the proffered wage during a given period, U.S. 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. No evidence was submitted to show that the petitioner 
employed the beneficiary. 
Page 4 
The petitioner is a limited liability company (LLC). Although structured and taxed as a partnership, its owners 
enjoy the same limited liability as the owners of a corporation. It is a legal entity separate and distinct from its 
owners. See Matter of M, 8 I&N Dec. 24 (BIA 1958; AG 1958). The debts and obligations of the company are 
not the debts and obligations of the owners or anyone else.' As the owners and others are not obliged to pay those 
debts, the income and assets of the owners and others and their ability, if they wished, to pay the company's debts 
and obligations, are irrelevant to this matter and shall not be further considered. The petitioner must show the 
ability to pay the proffered wage out of its own funds. 
Alternatively, in determining the petitioner's ability to pay the proffered wage, CIS will 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), affd, 703 
F.2d 57 1 (7th Cir. 1983). In K. C. P. Food Co., Inc. v. Sava, the court held that the Service 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. Supra at 1084. The court specifically rejected the argument that CIS should have 
considered income before expenses were paid rather than net income. Finally, no precedent exists that would 
allow the petitioner to "add back to net cash the depreciation expense charged for the year." Chi-Feng Chang 
v. Thornburgh, Supra at 537. See also Elatos Restaurant Corp. v. Sava, Supra at 1054. 
The tax returns demonstrated the following financial information concerning the petitioner's ability to pay the 
proffered wage of $26,540.80 per year from the priority date of August 22,2000: 
In 2000, the Form 1065 
 stated taxable income2 of $20,45 1.00. 
In 200 1, the Form 1065 for 
In 2002, the Form 1065 for 
In 2002, the Form 1065 
 stated a taxable income loss of 
$<$I 8,244.00>. 
1 
Although this general rule might be amenable to alteration pursuant to contract or otherwise, no evidence 
appears in the record to indicate that the general rule is inapplicable in the instant case. 
IRS Form 1065, Line 22. 
3 
 The symbols <a number> indicate a negative number, or in the context of a tax return or other financial 
statement, a loss, that is below zero. The Federal Employer Identification Number (FEIN) for for 
year 2002 is different from years 2000 and 2001. assumed the FEIN 
number for tax years 2002 and 2003. 
4 
 The record contains no evidence that the petitioner 
 qualities as a 
successor-in-interest t. This status requires documentary evidence that the petitioner has assumed 
all of the rights, duties, and obligations of the predecessor company. The fact that the petitioner is doing 
business at the same location as the predecessor does not establish that the petitioner is a successor-in-interest. 
In addition, in order to maintain the original priority date, a successor-in-interest must demonstrate that the 
predecessor had the ability to pay the proffered wage. Moreover, the petitioner must establish the financial 
ability of the predecessor enterprise to have paid the certified wage at the priority date. See Matter of Dial 
Auto Repair Shop, Inc., 19 I&N Dec. 481 (Comm. 1986). In the instant petition, the tax returns and partial 
The petitioner's net current assets can be considered in the determination of the ability to pay the proffered 
wage especially when there is a failure of the petitioner to demonstrate that it has taxable income to pay the 
proffered wage. In the subject case, as set forth above, the petitioner did not have taxable income sufficient to 
pay the proffered wage at any time between the years 2000 through 2003 for which the petitioner's tax returns 
are offered for evidence. 
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 liabilities.' A 
corporation's year-end current assets are shown on Schedule L, lines 1 through 6. That schedule is included 
with, as in this instance, the petitioner's filing of Form 1065 federal tax return. The petitioner's year-end 
current liabilities are shown on lines 16 through 18. If a corporation's end-of-year net current assets are equal 
to or greater than the proffered wage, the petitioner is expected to be able to pay the proffered wage. 
Examining the Form 1065 U.S. Income Tax Returns submitted by the petitioner, Schedule L found in each of 
those returns6 indicates the following: 
In 2000, petitioner's Form 1065 return forstated current assets of $73,297.00 and 
$85,946.00 in current liabilities. Therefore, the petitioner had <$12,649.00>~ in net current assets. 
Since the proffered wage is $26,540.80 per year, this sum is less than the proffered wage. 
In 2001, petitioner's Form 1065 return for stated current assets of $107,729.00 and 
$28,557.00 in current liabilities. Therefore, the petitioner had $79,172.00 in net current assets. Since 
the proffered wage is $26,540.80 per year, this sum is more than the proffered wage. 
There was no Schedule L submitted for 2002. 
In 2003, petitioner's Form 1065, Schedule L stated current assets of $79,615.00 and $31,021.00 in 
current liabilities. Therefore, the petitioner had $48,594.00 in net current assets. Since the proffered 
wage is $26,540.80 per year, this sum is more than the proffered wage. 
It is unclear that by combining the first two pages of the 2003 tax return for- 
LLC and the later submitted 2003 Schedule L without the rest of the return, that this is in fact the return filed with 
the U.S. Internal Revenue Service. 
000,2001 and 2002, and in 2002 and 2003 returns were then 
' According to Barron's Dictionary of Accounting Terms 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 as accounts 
payable, short-term notes payable, and accrued expenses (such as taxes and salaries). Id. at 118. 
The 2002 and 2003 returns were submitted incomplete without a Schedule L. The 2003 Schedule L was 
submitted later in this process without any other Form 1065 material. 
7 
 The symbols <a number> indicate a negative number, or in the context of a tax return or other financial 
statement, a loss, that is below zero. 
Page 6 
Therefore, for the tax years 2000 and 2002 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 ability to pay the beneficiary 
the proffered wage at the time of filing through an examination of its net current assets. 
Counsel asserts in his brief accompanying the appeal that there are other ways to determine the petitioner's 
ability to pay the proffered wage from the priority date. According to regulation,8 copies of annual reports, 
federal tax returns, or audited financial statements are the means by which petitioner's ability to pay is 
determined. 
Counsel contends that the beneficiary will replace "Cook 
 and, the beneficiary's expertise in 
banquets and catering will increase revenues for the petitioner. On appeal, counsel asserts the beneficiary will 
replace other workers on the payroll. The petitioner submitted no documentation establishing that the duties 
of the other workers are the same as those of the proffered position. If the duties are not the same, then in that 
case, the wages paid cannot be utilized to demonstrate the ability to pay the proffered wage from the priority 
date. 
However, the petitioner stated in a letter dated December 17,2004, tha 
 ho was the ChefKitchen 
Manager has departed as of March 200 1, and, his work has since been distributed through the last three years 
among "a number of hourly employees." The petitioner argues that consideration of the beneficiary's 
potential to increase the petitioner's revenues is appropriate, and establishes with even greater certainty that 
the petitioner has more than adequate ability to pay the proffered wage. The petitioner has not, however, 
provided any standard or criterion for the evaluation of such earnings. For example, the petitioner has not 
demonstrated that the beneficiary will replace less productive workers, or has a reputation that would increase 
the number of customers. 
Counsel advocates the use of the cash balance of the three business accounts to show the ability to pay the 
proffered wage. While the negative balance in the combined statement is negative (i.e. <$9,992,26>) for the 
period October 1, 2004 trough October 3 1, 2004, counsel's reliance on the balances in the petitioner's bank 
account 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. 9 204.5(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 hds 
reported on the petitioner's bank statements somehow reflect additional available funds that were not reflected on 
its tax return, such as the cash specified on Schedule L that will be considered below in determining the 
petitioner's net current assets. 
In the totality of all the evidence submitted in this case, there is evidence to demonstrate that the petitioner's 
ited a taxable income loss of 
stated a taxable income loss 
he, <$12,649.00> with Schedule L for 
2002 missing from the record of proceeding. It is uncertain whether or not Schedule L submitted separately 
for tax year 2003 is part of the entire 2003 tax return filed. 
9 C.F.R. 204.5(g)(2). 
Page 7 
Matter of Sonegawa, 12 I&N Dec. 612 (BIA 1967), relates to petitions filed during uncharacteristically 
unprofitable or difficult years but only in a framework of profitable or successful years. The petitioning entity 
in Sonegawa had been in business for over 11 years and routinely earned a gross annual income of about 
$100,000. During the year in which the petition was filed in that case, the petitioner changed business 
locations and paid rent on both the old and new locations for five months. There were large moving costs and 
also a period of time when the petitioner was unable to do regular business. The Regional Commissioner 
determined that the petitioner's prospects for a resumption of successful business operations were well 
established. The petitioner was a fashion designer whose work had been featured in Time and Look 
magazines. Her clients included Miss Universe, movie actresses, and society matrons. The petitioner's 
clients had been included in the lists of the best-dressed California women. The petitioner lectured on fashion 
design at design and fashion shows throughout the United States and at colleges and universities in California. 
The Regional Commissioner's determination in Sonegawa was based in part on the petitioner's sound 
business reputation and outstanding reputation as a couturiere. 
Unusual and unique circumstances have not been shown to exist in this case to parallel those in Sonegawa, to 
establish that the period examined was an uncharacteristically unprofitable period for the petitioner. By the 
evidence presented, the petitioner has not proven its ability to pay the proffered wage. 
The evidence submitted does not establish that the petitioner had the continuing ability to pay the proffered 
wage beginning on the priority date. 
Counsel's contentions cannot be concluded to outweigh the evidence presented in the corporate tax returns as 
submitted by petitioner that shows that the petitioner has not demonstrated its ability to pay the proffered 
wage from the day the Form ETA 750 was accepted for processing by any office within the employment 
system of the Department of Labor. 
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.