dismissed EB-3 Case: Software Engineering

U.S. Department of Homeland Security 
20 Mass. Ave., N.W., Rrn. 3000 
tdenwng dab deleted to 
prevent clearly unwamted 
invasion of personal privacy 
PUBLIC COPY 
Washington, DC 20529 
U.S. Citizenship 
and Immigration 
k, 
IN RE: 
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: SELF-REPRESENTED 
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. 
Ro ert P. Wiemann, Chief 
Administrative Appeals Office 
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 construction and restoration company. It seeks to employ the beneficiary permanently in 
the United States as a software engineer. 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 October 4, 2004 decision denying the petition, the single issue on appeal 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. 4 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. 4 204.5(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. 8 204.5(d). The priority date in the instant 
petition is April 27,2001. The proffered wage as stated on the Form ETA 750 is $85,134.00 per year. 
The AAO 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 a brief and no new evidence. 
 The petitioner also submits 
duplicate copies of tax returns of the petitioner which had been submitted prior to the decision of the director. 
Relevant evidence in the record includes copies of the petitioner's Form 1120 U.S. Corporation Income Tax 
Return for 2002; copies of Form 1120s U.S. Income Tax Return for an S Corporation of 
f 
, for 2001 and 2002; copies of New York State income tax returns corresponding to each o the foregoing 
federal income tax returns; copies of Form 941 Employer's Quarterly Federal Tax Returns of the petitioner 
for the second, third and fourth quarters of 2003; a letter dated March 1, 2004 from the petitioner's president; 
a letter dated March 2, 2004 fiom a certified public accounting firm; a copy of an academic equivalency 
evaluation for the beneficiary; copies of educational documents of the beneficiary; copies of checks drawn on 
an account of a plumbing business owned by the beneficiary; and a copy of a bank statement dated January 
18,2001 for an account of the beneficiary. 
On appeal, the petitioner states that the petitioner was organized in 2001 as an S corporation and that because 
its income passes through to its owners for income tax purposes, the accounting categories of net income and 
net current assets are not suitable as the bases for analysis of the petitioner's ability to pay the proffered wage. 
The petitioner states that in 2001 the petitioner had substantial total assets, sales and gross profits, and paid 
substantial amounts in salaries and wages to over 35 employees. The petitioner also states that non-cash 
expenses, including depreciation, should be considered as additional financial resources of the petitioner. The 
petitioner also states that compensation for the petitioner's president in the amount of $22,000.00 in 2001 was 
not a required payment. The petitioner states that in the following years the petitioner also had strong 
financial figures more than sufficient to pay the proffered wage. 
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. 
tj 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 June 26, 2003, the beneficiary did not 
claim to have worked for the petitioner and not 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 Colp. 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 (7th 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 
Page 4 
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. 
For the purpose of analysis of the petitioner's ability to 
 assumed that the 
petitioner,., is a successor in interest to 
 The issue of whether the 
evidence establishes that the petitioner is a successor in 
 , will be discussed 
below. 
The record contains copies of Form 1120s U.S. Income Tax Returns for an S Corporation of- 
for 2001 and 2002. The record also contains copies of the Form 1120 U.S. Corporation Income Tax Rehlm 
for 2002 of the petitioner, 
- 
The 1-140 petition was submitted on March 8, 2004. As of that date, the petitioner's Form 1120 tax return for 
2003 was not yet due, therefore its Form 1 120 tax return for 2002 was the most recent return then available. 
For a regular 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. 
For an S corporation, where the 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/ 
publirs-priorli 1 120s--2003 .pdf; Instructions for Form 1 120s (2002), available at http://www.irs.gov/pub/irs- 
prior/il120s--2002.pdf. Similarly, some deductions appear only on 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- 
priorli 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 Form 1120s of, shows no additional income or additional 
relevant deductions on the Schedule K. Therefore, for 2001 the corporation's figures for 
income on Schedule K, Line 23 are the same. For 2002, the Form 1120s tax return for 
indicates additional relevant deductions on Schedule K. For this reason, the net 
, in 2002 must be considered as the figure on Line 23 of the Schedule K, for income. 
The amounts on line 23 Schedule K of the Form 1120s tax returns of, are shown in the 
table below. Also shown in the table are the taxable income on line 28 of the petitioner's Form 1120 tax return 
for 2002 and the combined total net income in 2002 of , and the petitioner. 
Page 5 
Tax Net income Wage increase needed Surplus or 
year or (loss) to pay the proffered wage (deficit) 
2001 [1120S] $(5,242.00) $85,134.00* $(90,376.00) 
2002 [1120S] $(6,825.00) 
2002 [I1201 $(18,519.00) 
2002 [total] $(22,779.00) $85,134.00* $(107,9 13.00) 
* 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 either 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's attached to the tax returns of ., and the tax 
return of the petitioner yield the amounts for year-end net current assets as shown in the following table. 
Tax 
year 
Net 
current Wage increase needed Surplus or 
assets to pay the proffered wage (deficit) 
2001 [1120S] $(187,037.00) $85,134.00* $(272,17 1 .OO) 
2002 [1120S] $(195,793.00) 
2002 [I1201 $(27,075.00) 
2002 [total] $(245,97 1.00) $85,134.00* $(33 1,105.00) 
* 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 either of the years 
at issue in the instant petition. 
The record also contains copies of New York State tax returns which correspond to the federal income tax 
returns in the record. Those returns contain no significant relevant information beyond the information in the 
federal income tax returns discussed above. 
The petitioner states that the petitioner was organized in 2001 as an S corporation and that because its income 
passes through to its owners for income tax purposes, the accounting categories of net income and net current 
assets are not suitable as the bases for analysis of the petitioner's ability to pay the proffered wage. 
Nonetheless, the fact that income of an S corporation is deemed to be income of the petitioner's shareholder 
or shareholders for federal income tax purposes does not change the fact that an S corporation is an 
independent legal entity. Any income earned by an S corporation remains the property of the corporation 
unless actual transfers are made to the shareholder or shareholders, such as through payments for 
compensation of officers. Therefore it is appropriate to base an analysis of the petitioner's ability to pay the 
proffered wage on the petitioner's net income and on its net current assets. 
The petitioner asserts that non-cash expenses, including depreciation, should be considered as additional financial 
resources of the petitioner. 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 Property) (2004), at 1-2, available at http://www.irs.gov/pub/irs-pdfli4562.pdf. 
For the foregoing reason, 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. tj 204.5(g)(2), namely, annual reports or audited financial statements. 
The petitioner states that compensation paid to the petitioner's president in 2001 should be considered as 
additional financial resources of the petitioner, since that compensation was not a required payment. The 
Form 1120s of 
 or 2001 shows expenses for compensation of officers inthe amount of 
$22,000.00. The w- c e u e attached to that Form 1120s shows that the corporation's president was the 
corporation's sole shareholder that year. In certain circumstances it may be appropriate to consider officer 
compensation to a sole shareholder as additional financial resources of the petitioner. The sole shareholder of 
a corporation has 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. Corporation Income Tax Return. 
Nonetheless in the instant petition, even if the $22,000.00 paid in compensation in 2001 to the president om 
, was considered as additional income available to the petitioner for other expenses, the amount 
of officer compensation paid that year was far short of the amount which would have been needed to allow the 
petitioner to pay the proffered wage of $85,134.00, since paying the full proffered wage that year would still have 
left the petitioner with a large deficit in net income, in the amount of -$68,376.00. Moreover, for the year 2002, 
the tax returns in the record show no amounts paid for officer compensation either by 
Therefore, even if officer compensation is considered as 
the petitioner, the net income figures still fail to establish the petitioner's ability to pay the 
either of the years at issue in the instant petition. 
The petitioner also states that in 2001 the petitioner had substantial total assets, sales and gross profits, and 
paid substantial amounts in salaries and wages to over 35 employees. Concerning the petitioner's total 
assets, CIS does not rely on total assets, but only on current assets, as discussed above. Moreover, current 
liabilities must also be considered in order to ascertain whether any of the petitioner's current assets may be 
considered to be available to pay the proffered wage in a given year. 
Concerning the petitioner's total sales and gross profits, the Form 1120s tax returns of - 
show gross receipts in 2001 of $6,323,989.00 and total income of $1,535,020 that year, and gross receipts in 
2002 of $2,153.201.00 and total income that year of $732,104.00. The Form 1120 tax return of the petitioner 
shows gross receipts in 2002 of $243,708.00 and total income that year of $96,165.00. Although the figures 
Page 7 
for the two corporations indicate that the petitioning business has had substantial cash flows, the returns show 
large expense deductions, resulting in the negative net income figures on each return which are discussed 
above. 
The record contains copies of Form 941 Employer's Quarterly Federal Tax Returns of the petitioner for the 
second, third and fourth quarters of 2003. Those returns show total wages, tips and other compensation paid 
in the amounts of $86,353,83 in the second quarter, $174,442.35 in the third quarter and $146,440.09 in the 
fourth quarter. Although those compensation payments are significant, the beneficiary's proffered wage of 
$85,134.00 would be a significant additional expense to a payroll level of the size indicated by the petitioner's 
Form 941 returns. 
For the foregoing reasons, the figures for total sales, total income, and payroll expenses of 
Inc., and the petitioner fail to establish the petitioner's ability to pay the proffered wage in 
at issue in the instant petition. 
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 correctly stated the relevant net income fi 
 res for 2001 and 2002. The director 
correctly calculated the year-end net current assets of 
 , for 2001. However, in 
calculating the combined net current assets figure for Py ., and the petitioner for 2002, the 
director found that current liabilities exceeded current assets by $222,268.00, though the correct figure is 
$245,971.00. The director found that the net income figures and net current assets figures failed to establish 
the petitioner's ability to pay the proffered wage in those years. 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 the petitioner on appeal and the evidence submitted on 
appeal fail to overcome the decision of the director. 
Beyond the decision of the director, the evidence in the record fails to establish that the petitioner is in fact a 
successor in interest to., the corporation which filed the ETA 750 ap 
dated March 1, 2004 that 
the tax returns in the recor 
separate corporations. The addresses on 
in Brooklyn, New York, on the Form 
New York, on the Form 1120 tax 
The employer identification number on the Form 1120s tax 
returns o 
 while the employer number on 
the Form 1 120 tax return o 
 in the three digits 
ending in the three 
digits m' 
The Form 1120s tax returns of 
 show the date of election as an S corporation as 
January 15, 1998. The Form 1 120s tax return of for 2002 is not marked as a final 
return, as would be appropriate if that corporation ceased doing business in 2002. The Form 1120 tax return 
of, is for a C corporation and the return states the corporation's date of 
incorporation as January 27, 1999, a date which shows that that corporation already existed in 2001 when 
, submitted the ETA 750 application for labor certification. 
For the foregoing reasons, the statement of the petitioner's president in his March 1, 2004 letter that the 
petitioner simply changed its name is inconsistent with the information on the tax returns in the record. 
The record also contains a letter dated March 2, 2004 from a certified public accounting firm. That letter 
states in relevant part as follows: 
Please be advised that 
 . is an ongoing business venture that 
formally [sic] was known as 
Note that all liabiliti 
 has been assured [sic] and 
belonged now [sic] to 
 lease note that our address is 
the same. 
(Letter from certified public accounting firm, March 2,2004) 
The letter is on the letterhead of firm named 
 of Great Neck, New York. 
The letterhead refers to the firm as Certified Publlc Accountants. 
 'l'he letter bears the signature of no 
individual. Rather, the closing of the letter contains only the typed firm name and the words "Certified Public 
Accountants." Above the fik name in the space where a ;&nature would normally appear are the hand- 
written words ' 
The letter contains several grammatical errors. It uses the word "formally" where the apparent intended word 
is "formerly." The second sentence has a plural subject, "all liabilities and assets," but a singular verb form, 
"has been assured." 
For the foregoing reasons. the March 2. 2004 letter is not considered as credible evidence. The internal errors 
- - 
 " O--~ -- -2 
indicate that it was not written by a certified ublic accountant. Moreover, in asserting that 
was formerly known as D, the letter is inconsistent 
in the record, which, as discussed above, show that names refer to two separate corporations. 
The Board of Immigration Appeals, in Matter of Ho, 19 I&N Dec. 582, 591-592 (BLA 1988), has stated, "It is 
incumbent on the petitioner to resolve any inconsistencies in the record by independent objective evidence, 
and attempts to explain or reconcile such inconsistencies, absent competent objective evidence pointing to 
where the truth, in fact, lies, will not suffice." The record contains no explanation for the inconsistencies in 
the evidence noted above. 
To qualify a petitioner as a successor in interest 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. See Matter of Dia 
 ec. 481 (Comm. 1986). The evidence fails to 
establish that the petitioner 
 is a successor in interest to - 
Inc., the corporation which 
 lien Employment Certification. 
Any future motion pertaining to this petition should document the relationship between the two entities, = 
, and the petitioner, . including evidence pertaining to the 
matters discussed above. 
In summary, even assuming the existence of a successor in interest relationship, 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. Moreover, beyond the decision of the director, the evidence in the record 
fails to establish that the petitioner is a successor in interest to the corporation which filed the ETA 750 
application for labor certification. 
The burden of proof in these proceedings rests solely with the petitioner. Section 291 of the Act, 8 U.S.C. 8 1361. 
The petitioner has not met that burden. 
ORDER: The appeal is dismissed.