dismissed EB-3 Case: Restaurant/Culinary

hfifjdazg data deleted tB 
pmvent &lap unwarranted 
inv&m of peronal privacy 
PUBLIC COPY 
U.S. Department of Homeland Security 
20 Mass. Ave., N.W., Rm. 3000 
Washington, DC 20529 
U.S. Citizenship 
and Immigration 
%b 
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. fj 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, Vermont Service Center, and is 
now before the Administrative Appeals Office (AAO) on appeal. The appeal will be dismissed. 
The petitioner is a restaurant. It seeks to employ the beneficiary permanently in the United States as a cook. 
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 and timely and makes a specific allegation of error in law or 
fact. The procedural history of this case is documented in the record and is incorporated into this decision. 
Further elaboration of the procedural history will be made only as necessary. 
As set forth in the director's November 22, 2004 decision denying the petition, the single issue in this case is 
whether the evidence establishes the petitioner's 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. 8 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. 
The regulation at 8 C.F.R. fj 204.5(g)(2) states: 
AbiliQ 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 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 profitlloss 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. 8 204.5(d). The priority date in the instant 
petition is April 30, 2001. The proffered wage as stated on the Form ETA 750 is $12.65 per hour, which 
amounts to $26,3 12.00 annually. 
The MO reviews appeals on a de novo basis. See Dorr v. I.N.S. 891 F.2d 997, 1002, n. 9 (2d Cir. 1989). 
The AAO considers all pertinent evidence in the record, including any new evidence properly submitted on 
appeal. 
In the instant appeal, the petitioner submits no brief and no additional evidence, but submits duplicate copies 
of evidentiary documents previously submitted for the record. The petitioner also submits a copy of an 
Interoffice Memorandum dated May 4, 2004 from William R. Yates, Associate Director of Operations, CIS, 
Page 3 
to Service Center Directors and other CIS officials, titled Determination of Ability to Pay under 8 CFR 
204,5(g)(2). The Interoffice Memorandum is not an evidentiary document and is submitted by the petitioner 
as legal authority. 
Relevant evidence in the record includes copies of the petitioner's Form 1120s U.S. Income Tax Return for 
an S Corporation for 2001 and a copy of a letter dated August 12,2004 from a certified public accountant. 
On appeal, the petitioner states that additional evidence shows that the employer has continuously maintained 
the ability to pay the proffered wage of $12.65 per hour. 
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. Comm. 1977). 
 See also 8 C.F.R. 
4 204.5(g)(2). For each year at issue, the petitioner's financial resources generally must be sufficient to pay 
the annual amount of the beneficiary's 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 April 20, 2001, the beneficiary did not 
claim to have worked for the petitioner, and no other evidence in the record indicates that the beneficiary has 
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 Corp. 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), aff'd., 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 
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 Return for an S Corporation for 2001. The return is marked as an initial return, and it 
states that it covers the tax year beginning on March 3 1,2001 and ending on December 3 1,2001. 
The 1-140 petition was submitted on October 9, 2003. As of that date, the petitioner's Form 1120s tax return for 
its 2002 tax year should have been available, but no copy of that return was submitted with the 1-140 petition. In 
a request for additional evidence (RFE) issued on June 15, 2004 the director requested copies of the petitioner's 
Page 4 
2002 and 2003 federal tax returns, or, in the alternative, audited or reviewed financial statements for 2001, 2002 
and 2003. The petitioner's responses included a letter dated September 8, 2004 from counsel in which counsel 
stated that the 2002 and 2003 federal income tax returns of the petitioner had not yet been completed. Also 
submitted in response to the WE were a copy of a letter dated August 12,2004 from a certified public accountant 
and an additional copy of the petitioner's Form 1 120s tax return for 200 1. The petitioner's submissions in 
response to the RFE were received by the director on September 10,2004. 
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. 
See Internal Revenue Service, Instructions for Form 1120s (2003), available at http://www.irs.gov/pub/irs- 
prior/i1120s--2003.pdc Instructions for Form 1120s (2002), available at http://www.irs.gov/pub/irs-prior/i1120s- 
-2002.pdf. Similarly, some deductions appear only on the Schedule K. The cost of business property elected to 
be treated as an expense deduction under Section 179 of the Internal Revenue Code, rather than as a depreciation 
deduction, is carried over from line 12 of the Form 4562 to line 8 of the Schedule K. See Internal Revenue 
Service, Instructions for Form 4562 (2003), at 1, available at http://www.irs.gov/pub/irs-prior/i4562--2003.pdf; 
Internal Revenue Service, Instructions for Form 1120s (2003), at 22, available at http://www.irs.gov/pub/irs- 
pnorli 1 120s--2003 .pdf. 
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, for income. 
In the instant petition, the petitioner's tax return for 2001 indicates an additional relevant deduction under Section 
179 of the Internal Revenue Code. For this reason, the petitioner's net income must be considered as the amount 
shown on Line 23 of the Schedule K, for income, shown in the table below. 
Tax Net income Wage increase needed Surplus or 
year or (loss) to pay the proffered wage (deficit) 
2001 $2,041 .OO $26,3 12.00* $(24,27 1 .OO) 
2002 not submitted $26,3 12.00* no information 
2003 not submitted $26,3 12.00* no information 
* The full proffered wage, since the record contains no evidence of any wage 
payments made by the petitioner to the beneficiary. 
The above information fails to establish the petitioner's ability to pay the proffered wage in any of the years at 
issue in the instant petition. 
As an alternative means of determining the petitioner's ability to pay the proffered wages, 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. 
Calculations based on the Schedule L attached to the petitioner's tax return for 2001 yield the amount for 
year-end net current assets that year as shown in the following table. 
Tax 
year 
Net 
current Wage increase needed Surplus or 
assets to pay the proffered wage (deficit) 
200 1 $(22,978.00) $26,3 12.00* $(49,290.00) 
2002 not submitted $26,3 12.00* no information 
2003 not submitted $26,3 12.00* no information 
* The full proffered wage, since the record contains no evidence of any wage 
payments made by the petitioner to the beneficiary. 
The above information fails to establish the petitioner's ability to pay the proffered wage in any of the years at 
issue in the instant petition. 
The record contains a copy of a letter dated August 12,2004 from a certified public accountant. Letters from 
accountants are not among the three alternative forms of evidence required by the regulation at 8 C.F.R. 
tj 204.5(g)(2), namely copies of annual reports, federal tax returns, or audited financial statements. The 
accountant's letter states as follows: 
We have been the accountants for [the petitioner] since the start of their business on March 3 1, 
2001. Since that time we have noted that the Company has been managed effectively with 
increasing success, resulting in a stable and profitable business. We consider the company to be 
a "going concern" as that term is applied in our professional standards. 
In the nine month year ended December 3 1, 2001, the Company's total payroll, excluding officer 
compensation, was $86,3 19. In addition, to the best of our knowledge and belief the Company 
has met all of its payroll obligations to date. 
(Letter from certified public accountant, August 12,2004). 
The accountant's letter provides little additional information beyond that contained in the petitioner's Form 
1120s tax return for 2001. Nothing in the accountant's letter asserts that the petitioner had sufficient financial 
resources in 2001 to pay additional expenses of $26,312.00, which is the amount of the proffered wage. 
Moreover, the accountant's letter provides no financial information for the years 2002 or 2003. The 
accountant's letter therefore fails to establish the petitioner's ability to pay the proffered wage as of the 
priority date and continuing until the beneficiary obtains lawful permanent residence. 
In a letter dated September 8, 2004, counsel states that the petitioner's tax returns for 2002 and 2003 have not 
yet been completed. No explanation is given for the delay in the preparation of the petitioner's tax returns for 
those years. Nor has the petitioner submitted evidence for those years in one of the other two alternative 
forms of required evidence, that is, copies of annual reports or audited financial statements. Concerning the 
year 2001, counsel states that the petitioner's net assets were $28,565.00. However, as discussed above, CIS 
does not rely on net total assets, but on net current assets, since net current assets may be converted into cash 
within a reasonable time if needed to pay the proffered wage. CIS rejects the idea that the petitioner's total 
assets should be considered in the determination of the ability to pay the proffered wage. 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, be considered as financial 
resources available to pay the proffered wage. 
On appeal, the petitioner states that additional evidence shows that the employer has continuously maintained 
the ability to pay the proffered wage of $12.65 per hour. But in fact, no additional evidence has been 
submitted on appeal. The only document newly submitted on appeal is a copy of an Interoffice Memorandum 
dated May 4,2004 from William R. Yates, Associate Director of Operations, CIS, to Service Center Directors 
and other CIS officials, titled Determination of Ability to Pay under 8 CFR 204.5(g)(2). That memorandum 
provides guidance to CIS adjudicators evaluating certain employment-based immigrant visa petitions. The 
method of financial analysis specified in that memorandum is consistent with that followed by the director 
and is also consistent with the financial analysis above. Nothing in that memorandum indicates any error in 
the director's decision. 
The record contains no other evidence relevant to the petitioner's financial situation. 
Based on the foregoing analysis, the evidence in the record fails to establish the petitioner's ability to pay the 
proffered wage as of the priority date and continuing until the beneficiary obtains lawful permanent residence. 
In her decision, the director considered the petitioner's ordinary income in 2001 to be the measure of the 
petitioner's net income that year. However, as shown above, the proper figure for net income in the instant 
petition is that shown on Schedule K, Line 23, for income. The director correctly calculated the petitioner's 
year-end net current assets for 2001. Despite the director's error in the analysis of the petitioner's net income, 
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 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.