dismissed EB-3 Case: Roofing

Meatif~hg data deleted to 
mve~t cleariy Unwarranted 
hvsion of persona privacy 
PUBLIC COPY 
U.S. Department of Homeland Security 
20 Mass. Ave., N.W., Rm. A3042 
Washington, DC 20529 
U.S. Citizenship 
and Immigration 
Services 
 'b #* 
'2, 
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 1 153(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. 
. Wiemann, Director 
Administrative Appeals Office 
EAC-04-13 1-53924 
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 roofing and siding company. It seeks to employ the beneficiary permanently in the United 
States as a roofer. 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. 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 ths 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. 9 204.5(g)(2) states: 
Ability 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. 9 204.5(d). The priority date in the instant 
petition is March 6, 2001. The proffered wage as stated on the Form ETA 750 is $57,637.00 per year. On the 
Form ETA 750B, signed by the beneficiary on January 3 1,2001, the beneficiary did not claim to have worked 
for the petitioner. The ETA 750 was certified by the Department of Labor on August 27,2003. 
The 1-140 petition was submitted on March 30, 2004. On the petition, the petitioner claimed to have been 
established in 1998 and to currently have six employees. In the items on the petition for gross annual income 
and for net annual income the petitioner wrote "SEE ATTACHED." With the petition, the petitioner 
submitted supporting evidence. 
The director issued no request for additional evidence. 
In a decision dated September 1, 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. 
EAC-04-13 1-53924 
Page 3 
On appeal, counsel submits a brief and no additional evidence. Counsel states on appeal that the petitioner's tax 
returns in the record establish its ability to pay the proffered wage. Counsel states that the petitioner's payments 
to its owner and to other employees are evidence of its ability to pay the proffered wage. Finally, counsel states 
that the petitioner "has been in business for a substantial period of time and has a reasonable expectation of 
continuing in business, paying its staff and functioning effectively." (Brief, September 27,2004, at 1). 
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. 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 January 3 1,2001, the beneficiary did not claim 
to have worked for the petitioner. The record contains a letter dated September 8, 2003 from the petitioner's 
president stating that the beneficiary has been subcontracting jobs from the petitioner since October 1999, 
principally building and rebuilding commercial and residential roofs. However, that letter contains no 
information on the amounts of any payments to the beneficiary for that work, nor does the record contain any 
other evidence which indicates the amounts of any payments made by the petitioner to the beneficiary. 
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 57 1 (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 Returns for an S Corporation for 2001 and 2002. The record before the director closed 
on March 30, 2004 with the submission of the 1-140 petition and supporting documentation. As of that date the 
petitioner's federal tax return for 2003 was not yet due. Therefore the petitioner's tax return for 2002 is the most 
recent return available. 
EAC-04-13 1-53924 
Page 4 
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 1 120s. The instructions on the 
Form 1120s U.S. Income Tax Return for an S Corporation state on page one, "Caution: Include only trade or 
business income and expenses on lines la through 21 ." Where an S corporation has income from sources other 
than from a trade or business, that income is reported on Schedule K. An S corporation's total income from its 
various sources are reported on lines 1 through 6 of the Schedule K, Shareholders' Shares of Income, Credits, 
Deductions, etc. For example, an S corporation's interest income is stated on line 4a of the 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 1 120s (2002), available at http://www.irs.gov/pub/irs-prior/i1120s- 
-2002.pdf. 
 Similarly, some deductions appear only on the Schedule K. 
 See Internal Revenue Service, 
Instructions for Form 1 120s (2003), at 22, available at http://www.irs.gov/pub/irs-prior/i1120s--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 income fiom activities other than from a trade 
or business, namely interest income. Therefore the figure for ordinary income on line 21 of page one of the 
petitioner's Form 1120s tax return for 200 1 does not include some of the petitioner's income. For this reason, the 
petitioner's net income for 2001 must be considered as the total of its income as shown on the Schedule K. The 
corresponding figure on the Schedule K for 2002 will be considered as the petitioner's net income for 2002. No 
additional deductions are shown on the petitioner's Schedule K's in the record for 2001 or for 2002. 
In the instant case, the petitioner's tax returns show amounts for income on line 23, 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. 
The above information is insufficient to establish the petitioner's ability to pay the proffered wage in either 
2001 or 2002. 
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. 
EAC-04-13 1-53924 
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 Beginning of 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 
The above information is insufficient to establish the petitioner's ability to pay the proffered wage in either 
2001 or 2002. 
Counsel asserts that payments to "the owner" in the amount of $140,000.00 are evidence of additional financial 
resources of the petitioner. The petitioner's tax returns show deductions for compensation of officers in the 
amount of $140,000.00 in 2001 and in that same amount of $140,000.00 in 2002. 
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 basic rule of law concerning corporations 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); 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. 
Nonetheless, under the principles of Matter of Sonegawa, 12 I&N Dec. 612 (Reg. Comrn. 1967), CIS may 
consider the totality of the circumstances affecting the petitioner's ability to pay the proffered wage. The sole 
shareholders of a corporation have the authority to allocate expenses of the corporation for various legitimate 
business purposes, including for the purpose of reducing the corporation's taxable income. Compensation of 
officers is an expense category explicitly stated on the Form 1120s U.S. Income Tax Return for an S Corporation. 
In the instant case, counsel refers to payments in the amount of $140,000.00 to "the owner." However, the 
Schedule K-1's attached to the petitioner's Form 1120s tax returns for 2001 and 2002 show that the petitioner's 
shares are not owned by one individual. The Schedule K-1's show that two individuals each own 33.33333% of 
the petitioner's shares and that a third individual owns 33.33334% of the petitioners' shares. The individual 
owning 33.3334% is the petitioner's president. 
The evidence does not indicate whether the payments of $140,000.00 for compensation of officers were made 
only to the president or whether they were divided among two or more individuals. The petitioner's Form 1120s 
tax return for 2001 shows deductions for salaries and wages of $168,550.00, in addition to the $140,000.00 stated 
for compensation of officers. The petitioner's Foim 1120s tax return for 2002 shows deductions for salaries and 
wages of $171,717.00 in addition to the $140,000.00 stated for compensation of officers in 2002. But the 
evidence provides no information on the identities of the recipients of those payments for salaries and wages. 
The fact that the figures for compensation of officers was the same amount of $140,000.00 in both 2001 and 2002 
suggests that that amount represents fixed salary commitments of the petitioner to its officers, rather than a 
EAC-04- 13 1-53924 
Page 6 
distribution of the petitioner's profits. Moreover, the record contains no evidence indicating that one or more of 
the petitioner's officers would have been willing and able to foregoing some portion of his or her compensation in 
order to pay the proffered wage to the beneficiary if needed. 
Counsel asserts that the petitioner has been in business for a substantial period of time and has a reasonable 
expectation of continuing in business and of paylng its staff. In support of these assertions counsel relies on 
Matter of Sonegawa, 12 I&N Dec. 612 (Reg. Cornm. 1967). However, counsel's reliance on Matter of Sonegawa 
is misplaced. That case relates to a petition filed during uncharacteristically unprofitable or difficult years, but 
only within 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 $100,000.00. 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 Cornmissioner determined 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, parallel to those in Sonegawa, have been shown to exist in this case, nor has it been 
established that 200 1 and 2002 were uncharacteristically unprofitable years for the petitioner. 
Counsel also relies on Full Gospel Portland Church v. Thornburgh, 730 F. Supp. 441 (D.D.C. 1988). The 
decision in Full Gospel is not binding here. Although the AAO may consider the reasoning of the decision, 
the AAO is not bound to follow the published decision of a United States district court in cases arising within 
the same district. See Matter of K-S-, 20 I&N Dec. 7 15 (BIA 1993). Moreover, Full Gospel Portland Church 
v. Thornburgh was decided in the United States district court for the District of Columbia. In the instant 
petition, the petitioner is located in New Jersey. Further, the decision in Full Gospel is distinguishable from 
the instant case. The court in Full Gospel ruled that CIS should consider the pledges of parishioners in 
determining a church's ability to pay the wages of a piano teacher. In the instant petition, there is no evidence 
of additional potential income from any sources other than those shown on the petitioner's Form 1120s 
income tax returns. The income shown on the Form 1 120s tax returns has been fully considered above. 
Counsel also asserts that the director based her decision in part on the fact that "the petitioner did not submit 
any additional evidence to support their ability to pay." (Brief, September 27, 2001, at 1). Counsel then 
rebuts the director's supposed reasoning by stating that the petitioner's 2001 and 2002 tax returns were 
attached to the petition. However, counsel misreads the director's decision. The director's decision fully 
considered the petitioner's Form 1120s tax returns for 2001 and 2002, and found that the information on 
those returns failed to establish the petitioner's ability to pay the proffered wage in either of those years. The 
director's statement that the petitioner "did not submit any additional evidence" to demonstrate its ability to 
pay the proffered refers to the absence of any evidence in addition to the Form 1 120s tax returns. 
In her decision, the director failed to consider interest income of the petitioner shown on the Schedule K for 
2001, but the amount of that interest income was not great enough to affect the director's analysis. The 
director found that the petitioner's net income was insufficient to establish its ability to pay the proffered 
wage in 2001 or in 2002. The director correctly calculated the petitioner's year-end net current assets for 
2001 and 2002 and similarly found that those figures were insufficient to establish the petitioner's ability to 
EAC-04-13 1-53924 
Page 7 
pay the proffered wage in those years. The director's decision to deny the petition was correct. 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. 5 1361. 
The petitioner has not met that burden. 
ORDER: The appeal is dismissed.