dismissed EB-3 Case: Restaurant Management

identifying data deleted b 
prevent clearly unwarranted 
invasiog of personal privacy 
PUBLIC COPY 
U.S. Department of Homeland Security 
20 Mass. Ave., N.W., Rm. A3042 
Washington, DC 20529 
U.S. Citizenship 
and Immigration 
FILE: EAC-04-006-52507 Office: VERMONT SERVICE CENTER Date: MAR 2 1 2006 
IN RE: 
PETITION: 
 Petition for Alien Worker as a Slulled 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. 
~odert P. Wiemann, Director 
Administrative Appeals Office 
EAC-04-006-52507 
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 Chinese restaurant. It seeks to employ the beneficiary permanently in the United States as 
a Chinese restaurant manager. 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. 
Section 203(b)(3)(A)(i) of the Immigration and Nationality Act (the Act), 8 U.S.C. fj 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 slulled 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: 
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 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. fj 204.5(d). The priority date in the instant 
petition is April 25, 2001. The proffered wage as stated on the Form ETA 750 is $27.21 per hour, which 
amounts to $56,596.80 annually. On the Form ETA 750B, signed by the beneficiary on April 20, 2001, the 
beneficiary did not claim to have worked for the petitioner. The ETA 750 was certified by the Department of 
Labor on May 3 1,2003. 
The 1-140 petition was submitted on October 6, 2003. On the petition, the petitioner claimed to have been 
established in 1992, to currently have 20 employees and to have a gross annual income of $1,552,139.00. In 
the item for net annual income the petitioner wrote "please see attached tax return." (1-140 petition, Part 5). 
With the petition, the petitioner submitted supporting evidence. 
In a request for evidence (WE) dated June 15, 2004, the director requested additional evidence relevant to the 
date of birth of the petitioner's owner. 
In response to the RFE, the petitioner submitted additional evidence. The petitioner's submissions in response 
to the RFE were received by the director on August 30,2004. 
EAC-04-006-52507 
Page 3 
In a decision dated September 22, 2004, the director determined that the evidence did not establish that the 
petitioner had the ability to pay the proffered wage as of the priority date and continuing until the beneficiary 
obtains lawful permanent residence, and denied the petition. 
On appeal, counsel submits a brief and additional evidence. Counsel states on appeal that the director based her 
analysis of the petitioner's net income on the incorrect line on the petitioner's tax return in the record, using the 
figure for taxable income on line 30, after the net operating loss deduction, rather than the figure on line 28, for 
taxable income before the net operating loss deduction. Counsel also states that the director should have 
considered depreciation deductions as additional financial resources of the petitioner. Also, counsel states that the 
director failed to credit the petitioner with compensation actually paid to the beneficiary in the year 200 1. 
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. 
 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 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 lawhl 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. § 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 April 20,2001, the beneficiary did not claim to 
have worked for the petitioner. However, the record contains a copy of a Form W-2 Wage and Tax Statement of 
the beneficiary for 2001, showing compensation received from the petitioner. The record before the director 
closed on August 30,2004 with the receipt by the director of the petitioner's submissions in response to the RFE. 
As of that date, any Form W-2's of the beneficiary for 2002 and 2003 should have been available, but none were 
submitted for those years. 
The beneficiary's compensation from the petitioner in 2001 is shown in the table below. 
Wage increase 
Beneficiary's actual needed to pay 
Year compensation Proffered wage the proffered wage 
200 1 $16,250.00 $56,596.80 $40,396.80 
2002 not submitted $56,596.80 no information 
2003 not submitted $56,596.80 no information 
EAC-04-006-52507 
Page 4 
The above information is insufficient to establish the petitioner's ability to pay the proffered wage in any of 
the years at issue in the instant petition. 
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), aff'd., 703 F.2d 571 (7" Cir. 1983). In K.C.P. Food Co., Inc., the court held that the Imgration 
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 a corporation. The record contains copies of the petitioner's Form 
1120 U.S. Corporation Income Tax Return for 2001. As noted above, the record before the director closed on 
August 30,2004 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 returns for 2002 and 2003 should have been available, but no copies of the 
petitioner's tax returns for 2002 or 2003 were submitted for the record prior to the director's decision, nor have 
copies of those returns been submitted on appeal. 
For a corporation, CIS considers net income to be the figure shown on line 28, taxable income before net 
operating loss deduction and special deductions, of the Form 1120 U.S. Corporation Income Tax Return. 
Counsel asserts that the director based her analysis of the petitioner's net income on the incorrect line on the 
petitioner's tax return in the record, using the figure for taxable income on line 30, after the net operating loss 
deduction, rather than the figure on line 28, for taxable income before the net operating loss deduction. Counsel 
is correct in this assertion. The director should have used the figure on line 28 as the measure of the petitioner's 
net income for 2001. Counsel also states that the director failed to credit the petitioner with compensation 
actually paid to the beneficiary in the year 2001. Counsel is correct in stating that the director failed to properly 
consider the actual compensation of the beneficiary in relation to the petitioner's net income. In her decision, the 
director stated that the beneficiary's actual compensation in 2001 was far below the proffered wage, but the 
director did not credit the petitioner with its payment to the beneficiary when the director analyzed the petitioner's 
net income and net current assets. 
As shown in the analysis above, crediting the petitioner with the actual compensation paid to the beneficiary in 
2001 shows that the wage increase needed to raise the beneficiary's actual compensation to the proffered wage in 
2001 was $40,396.80. The relationship of that figure to the petitioner's net income is shown in the table below. 
The amount of the petitioner taxable income on line 28 on the petitioner's tax return for 2001 is shown in the 
column for net income. 
EAC-04-006-52507 
Page 5 
Tax Wage increase needed Surplus or 
year Net income to pay the proffered wage deficit 
200 1 $29,539.00 $40,396.80* -$10,807.80 
2002 not submitted $56,596.80** no information 
2003 not submitted $56,596.80** no information 
* Crediting the petitioner with the $16,250.00 actually paid to the beneficiary 
in 200 1. 
** The full proffered wage, since the record contains no evidence of any wage 
payments made by the petitioner to the beneficiary in 2002 or 2003. 
The above information is insufficient to establish the petitioner's ability to pay the proffered wage in any of 
the years at issue in the instant petition. 
Counsel states that the director should have considered depreciation deductions as additional financial resources 
of the petitioner. Counsel also submits for the first time on appeal an undated letter fkom a certified public 
accountant in which the accountant states that the petitioner's depreciation deduction of $26,376.00 in 2001 
should be considered as funds available to pay the proffered wage in 2001. 
While it is true that in any particular year a taxpayer's depreciation deductions may not reflect the taxpayer's 
actual cash operating expenses, depreciation deductions do reflect actual costs of operating a business, since 
depreciation is a measure of the decline in the value of a business asset over time. See Internal Revenue Service, 
Instructions for Form 4562, Depreciation and Amortization (Including Information on Listed Propertyl (2004), at 
1-2, available at http://www.irs.gov/pub/irs-pdfli4562.pdf. Moreover, in terms of cash flow, if any of the 
petitioner's depreciable assets had been financed through business loans, the repayments of principal on those 
loans, which are customarily a part of periodic loan repayments, would not be deductible expenses. Therefore, a 
petitioner may have cash operating expenses which do not appear on its income tax returns. In the instant 
petition, the petitioner's Form 1 120 tax return for 2001 shows deductions of $7,425.00 for interest, indicating that 
the petitioner had business loans outstanding during 2001. 
For the foregoing reasons, when a petitioner chooses to rely on its federal tax returns as evidence of its ability 
to pay the proffered wage, CIS considers all of the petitioner's claimed tax deductions when evaluating the 
petitioner's net income. See Elatos Restaurant Corp. 632 F. Supp. at 1054. If a petitioner does not wish to 
rely on its federal tax returns as evidence of its ability to pay the proffered wage, the petitioner is free to rely 
on one of the other alternative forms of required evidence as specified in the regulation at 
8 C.F.R. 204.5(g)(2), namely, annual reports or audited financial statements. Moreover, even in situations 
where a petitioner's net income and net current assets for a given year are insufficient to establish the 
petitioner's ability to pay the proffered wage, 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). 
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 
EAC-04-006-52507 
Page 6 
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'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 Beginning of year End of year to pay the proffered wage 
200 1 -$19,470.00 $5,732.00 $40,396.80* 
2002 not submitted not submitted $56,596.80** 
2003 not submitted not submitted $56,596.80** 
* Crediting the petitioner with the $16,250.00 actually paid to the beneficiary 
in 200 1. 
** The full proffered wage, since the record contains no evidence of any wage 
payments made by the petitioner to the beneficiary in 2002 or 2003. 
The above information is insufficient to establish the petitioner's ability to pay the proffered wage in any of 
the years at issue in the instant petition. 
The record also contains a copy of the petitioner's Form CT-4, New York General Business Corporation 
Franchise Tax Return Short Form for 2001. That tax return contains no significant information beyond the 
information shown on the petitioner's Form 1120 U.S. Corporation Income Tax Return for 2001 which is 
discussed above. 
The record contains no other evidence relevant to the petitioner's financial situation. For the above reasons, 
the evidence 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 incorrectly stated the petitioner's net income in 2001 as zero, using the figure for 
taxable income on line 30 of the petitioner's Form 1120 tax return for 2001, for taxable income after 
deductions for net operating loss and special deductions. The director should have used the figure on line 28, 
for taxable income before the net operating loss deductions and special deductions. As shown above, the 
figure on line 28 of the petitioner's Form 1120 for 2001 is $29,539.00. The director also incorrectly used the 
term "ordinary income" to refer to the petitioner's taxable income. The term "ordinary income" does not 
appear on the Form 1120 U.S. Corporation Income Tax Return. The director correctly calculated the 
petitioner's year-end net current assets for 2001. 
Although the decision of the director contained the errors in analysis noted above, the decision of the director 
to deny the petition was correct, based on the evidence then in the record. For the reasons discussed above, 
the assertions of counsel on appeal and the evidence newly submitted on appeal fail to overcome the decision 
of the director. 
EAC-04-006-52507 
Page 7 
The burden of proof in these proceedings rests solely with the petitioner. Section 291 of the Act, 8 U.S.C. 9 1361. 
The petitioner has not met that burden. 
ORDER: The appeal is dismissed.