dismissed EB-3 Case: Retail Management

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PUBLIC COPY 
U.S. Department of Homeland Security 
20 Mass. Ave., N.W., Rm. A3042 
Washington, DC 20529 
U. S. Citizenship 
and Immigration 
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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. 
6 
Robert P. Wiemann, Director 
Administrative Appeals Office 
Page 2 
DISCUSSION: The preference visa petition was denied by the Acting Center Director (Director), Vermont 
Service Center, and is now before the Administrative Appeals Office (AAO) on appeal. The appeal will be 
dismissed. 
The petitioner is a chain of Dunkin donuts. It seeks to employ the beneficiary permanently in the United 
States as a retail chain store area supervisor. As required by statute, the petition is accompanied by a Form 
ETA 750, Application for Alien Employment Certification, approved by the 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. 
On appeal, counsel submits a brief statement and additional evidence.' 
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. 
The regulation 8 C.F.R. 5 204.5(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 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. 
5 204.5(d). Here, the Form ETA 750 was accepted on April 9, 2001. The proffered wage as stated on the 
Form ETA 750 is $1 14,469.30 per year. On the petition, the petitioner claimed to have been established in 
1999, but did not provide information on the gross annual income, net income and number of employees. 
According to the tax returns in the record, the petitioner was elected as an S corporation on December 31, 
2000 and the petitioner's fiscal year is based on a calendar year. On the Form ETA 750B, signed by the 
beneficiary on May 21,2003, the beneficiary did not claim to have worked for the petitioner. 
The petitioner submitted the petition with Form 1120s tax return for 2001 and 2002 filed by the petitioner. 
On April 29, 2004, because the director deemed the evidence submitted insufficient to demonstrate 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). The AAO will f~st evaluate the decision of the director, based on the 
evidence submitted prior to the director's decision. The evidence submitted for the first time on appeal will then 
be considered. 
Page 3 
petitioner's continuing ability to pay the proffered wage beginning on the priority date, the director requested 
additional evidence pertinent to that ability. 
 In accordance with 8 C.F.R. 5 204.5(g)(2), the director 
specifically requested that the petitioner submit additional evidence to establish that the petitioner had the 
ability to pay the proffered wage or salary of $1 14,469.30 as of April 9, 2001, the date of filing and 
continuing to the present. The director also requested the petitioner provide information on the current 
number of employees, the proffered position and copies of the beneficiary's W-2 forms. 
In response, the petitioner submitted the petitioner's tax returns for 2001 and 2002, the individual tax return 
for 2001 filed by the petitioner's owner and the petitioner's bank account statements. 
On August 30, 2004, the director denied the petition, finding that the petitioner's 2001 federal tax return 
shows a net income of $46,662 and net current assets of $(336,215), and therefore, did not establish that it had 
the ability to pay the proffered wage beginning on the priority date. 
On appeal counsel asserts that with the gross receipts of $1,188,695 and a net income of $46,662, plus labor 
cost of $399,609 paid, depreciation of $15,000, and current assets of $1,079,000 in 2001 the petitioner 
demonstrated its ability to pay the proffered wage. Counsel also claims that is one of a group of 
four related S corporations, all of which are owned and controlled by Mr. and the group's total net 
income of $1213 13 should be considered. 
In determining the petitioner's ability to pay the proffered wage during a given period, 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. In the instant case, the petitioner did not submit the 
beneficiary's W-2 forms or any other evidence of the beneficiary's compensation from the petitioner although 
counsel claims that the beneficiary is working for the petitioner and paid with cash. However, the assertions 
of counsel do not constitute evidence. Matter of Obaigbena, 19 I&N Dec. 533, 534 (BIA 1988); Matter of 
Ramirez-Sanchez, 17 I&N Dec. 503, 506 (BIA 1980). Therefore, the petitioner has not established that it hired 
and paid the beneficiary the proffered wage or any part of it. Counsel advises to consider cost of labor as a 
part of the petitioner's ability to pay. However, in general, wages already paid to others are not available to 
prove the ability to pay the wage proffered to the beneficiary at the priority date of the petition and continuing to 
the present. 
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 as the petitioner urges us to 
consider on appeal. 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, 719 F. Supp. 532 (N.D. Texas 1989); K.C. P. Food Co., 
Znc. 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 (7th Cir. 1983). Counsel claims on appeal that the petitioner generated gross receipts in the 
amount of $1,188,695. Counsel implies to consider the petitioner's gross receipts in determining its ability to 
pay the proffered wage. Counsel's reliance on the petitioner's gross receipts, depreciation, and wage expense 
is misplaced. Showing that the petitioner's gross receipts exceeded the proffered wage is insufficient. 
Similarly, showing that the petitioner paid compensation to officers in excess of the proffered wage is 
insufficient. 
Counsel's reliance on depreciation in determining the petitioner's ability to pay the proffered wage is 
misplaced. In K.C.P. Food Co., Inc. v. Sava, 623 F. Supp. at 1084, 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. The court specifically 
rejected the argument that the Service should have considered income before expenses were paid rather than 
net income. The court in Chi-Feng Chang further noted: 
Plaintiffs also contend the depreciation amounts on the 1985 and 1986 returns are non-cash 
deductions. Plaintiffs thus request that the court sua sponte add back to net cash the 
depreciation expense charged for the year. Plaintiffs cite no legal authority for this 
proposition. This argument has likewise been presented before and rejected. See Elatos, 632 
F. Supp. at 1054. [CIS] and judicial precedent support the use of tax returns and the net 
income figures in determining petitioner's ability to pay. Plaintiffs' argument that these 
figures should be revised by the court by adding back depreciation is without support. 
(Emphasis in original.) Chi-Feng at 537. 
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 and 2002. The tax returns demonstrate 
the following financial information concerning the petitioner's ability to pay the proffered wage of 
$1 14,469.30 per year from the priority date. 
In 2001, the Form 1120s stated net income2 of $46,662. 
In 2002, the Form 1120s stated net income of $145,957. 
Therefore, for the year 2001, the petitioner did not have sufficient net income to pay the proffered wage, 
however, the petitioner established that its net income reflected on Line 21 of Form 1120s for 2002 was 
sufficient to pay the beneficiary the proffered wage. 
If the net income the petitioner demonstrates it had available during that 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 ~iabilities.~ 
 A 
corporation's year-end current assets are shown on Schedule L, lines 1 through 6. 
 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 
2 
 Ordinary income (loss) from trade or business activities as reported on Line 21. 
3~ccording to Barron's Dictionary of Accounting Terms 117 (31d 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 accounts 
payable, short-term notes payable, and accrued expenses (such as taxes and salaries). Id. at 118. 
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. Counsel asserts in his brief 
accompanying the appeal that the petitioner's 2001 tax return clearly reflects total current assets of 
$1,079,000. Counsel misinterprets the tax return and the analysis employed by CIS. Calculations based on 
the Schedule L's attached to the petitioner's tax return for 2001 yield that the petitioner had current assets of 
$58,041 (cash of $(13,251) on line 1 of Schedule L plus other current assets of $71,292 on line 6) and current 
liabilities of $394,256 (mortgages, notes, bonds payable in less than 1 year of $75,658 on line 17 plus other 
current liabilities of $318,598 on line 18), therefore, net current assets were $(336,214) in that year. 
Therefore, the petitioner did not have sufficient net current assets to pay the proffered wage for the year 2001. 
Therefore, 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 wages paid to the beneficiary, or its net income or net current 
assets. The petitioner had not established its ability in 2003 because of its failure to submit regulatory 
prescribed evidence for the year. The director's RFE dated April 29, 2004 expressly requested additional 
evidence to establish the petitioner's ability to pay the proffered wage as of April 9, 2001, the date of filing 
and continuing to the present. (emphasis added). The record before the director closed on July 26, 2004 with 
the receipt by the director of the petitioner's submissions in response to the RFE. As of that date the federal tax 
return of the petitioner for 2003 should have been available as the most recent return. However, the petitioner did 
not submit its tax return for 2003, nor it explained why the tax retum was not submitted. The regulation at 8 
C.F.R. 5 204.5(g)(2) states that the director may request additional evidence in appropriate cases. Although 
specifically and clearly requested by the director, the petitioner declined to provide copies of its tax retum. 
The 2003 tax return would have demonstrated the amount of taxable income the petitioner reported to the IRS 
and further reveal its ability to pay the proffered wage. The petitioner's failure to submit these documents 
cannot be excused. The failure to submit requested evidence that precludes a material line of inquiry shall be 
grounds for denying the petition. See 8 C.F.R. 5 103.2(b)(14). 
r corporations, i.e. the petitioner, 
with the group's total net income mP o 
and argues that the director faile 
 a1 net income of the group in determining the 
petitioner's ability to pay the proffered wage. Contrary to counsel's assertion, 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. 5 204.5, permits [CIS] to consider the financial resources of individuals or entities who have no legal 
obligation to pay the wage." In h instant case, the petitioner is a separate and distinct legal corporation. 
Therefore, neither assets of Mr dh nor of the three corporations cannot be considered in determining the 
petitioner's ability to pay the proffered wage. 
Counsel argues on appeal that the petitioner's monthly bank balances establish that it has the financial ability 
to pay the proffered wage. Counsel refers to decisions of the AAO dated April 17, 1995 and August 16, 1995 
concerning balances in a petitioner's bank account. While 8 C.F.R. 5 103.3(c) provides that precedent decisions 
of CIS are binding on all its employees in the administration of the Act, unpublished decisions are not similarly 
binding. Precedent decisions must be designated and published in bound volumes or as interim decisions. 
8 C.F.R. 5 103.9(a). Counsel's reliance on the balance in the petitioner's bank account in the instant case is 
Page 6 
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 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 was considered in determining the petitioner's net current assets. 
Counsel contends that the petitioner's financial situation is consistent with the seminal case of Matter of 
Sonegawa, 12 I&N Dec. 612 (BIA 1967). Matter of Sonegawa 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. 
No unusual circumstances have been shown to exist in this case to parallel those in Sonegawa, nor has it been 
established that 2001 was an uncharacteristically unprofitable year in a framework of profitable or successful 
years for the petitioner. 
Counsel's assertions on appeal cannot be concluded to outweigh the evidence presented in the tax returns as 
submitted by the petitioner that demonstrates that the petitioner could not pay the proffered wage from the day 
the Form ETA 750 was accepted for processing by 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. 
5 1361. The petitioner has not met that burden. 
ORDER: The appeal is dismissed.