dismissed EB-3 Case: Wholesale Trade

identieing data deleted to 
prevent clearly unwarranted 
invasion of mnal privacy 
PUBLIC COPY 
U.S. Department of Homeland Security 
20 Mass, N.W. Rm. A3042 
Washington, DC 20529 
U. S. Citizenship 
and Immigration 
- 
SRC 02 088 53450 
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. 
Robert P. Wiemann, Director 
Administrative Appeals Office 
DISCUSSION: The preference visa petition was denied by the Director, Texas Service Center, and is now 
before the Administrative Appeals Office on appeal. The appeal will be dismissed. 
The petitioner' is a generators and components business corporation. It seeks to employ the beneficiary 
permanently in the United States as a wholesaler. As required by statute, the petition is accompanied by a 
Form ETA 750, Application for Alien Employment Certification, approved by the U. S. 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 and additional evidence. 
Section 203(b)(3)(A)(i) of the Immigration and Nationality Act (the Act), 8 U.S.C. 9 1153@)(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 at 8 C.F.R. 5 204.5(g)(2) states in pertinent part: 
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 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. The petitioner must 
also demonstrate that, on the priority date, the beneficiary had the qualifications stated on its Form ETA 750 
Application for Alien Employment Certification as certified by the U.S. Department of Labor and submitted with 
the instant petition. Matter of Wing's Tea House, 16 I&N Dec. 158 (Act. Reg. Cornrn. 1977). 
Here, the Form ETA 750 was accepted on March 2, 2000. The proffered wage as stated on the Form ETA 
750 is $480.00 per week ($24,960.00 per year). The Form ETA 750 states that the position requires two years 
experience. 
Counsel submitted copies of the following documents: the original Form ETA 750, Application for Alien 
Employment Certification, approved by the U.S. Department of Labor; U.S. Internal Revenue Service tax 
returns for 2001 and 2002; letters from the petitioner; lease information; corporation organizational 
documents; advertisements for sales goods; sales invoices; a personnel organization chart; W-2 statements; 
approximately 57 cancelled checks; a telephone directory company listing; business license; product catalogs; 
and, copies of documentation concerning the beneficiary's qualifications as well as other documentation. 
1 
A prior 1-140 petition, for the beneficiary by petitioner, file number SRC 02 213 51854, was withdrawn on 
September 16,2003. 
Page 3 
Because the Director determined the evidence submitted with the petition was insufficient to demonstrate the 
petitioner's continuing ability to pay the proffered wage beginning on the priority date, consistent with 8 
C.F.R. 9 204.5(g)(2), the Director issued a Notice of Intent to Deny on June 26, 2003, and requested pertinent 
evidence of the petitioner's ability to pay the proffered wage beginning on the priority date. 
The Director requested, among other items, the petitioner's U.S. federal tax returns for 2001 and 2002, and, a 
Form W-2 Wage and Tax Statement for the beneficiary as well as a Form 941 "Employer's Quarterly Federal 
Tax Return" for petitioner's employees. 
In response to the Notice of Intent to Deny, petitioner submitted the petitioner's U.S. Internal Revenue Service 
(IRS) Form 1 120s tax returns for years 2001 and 2002, and, W-2 statements for two employees. 
The director denied the petition on May 3, 2004, finding that the evidence submitted did not establish that the 
petitioner had the continuing ability to pay the proffered wage beginning on the priority date. 
On appeal, counsel asserts that the net income of petitioner, and, the wages paid to the beneficiary by the 
petitioner since 2000 evidence the ability to pay the proffered wage. 
Counsel has submitted copies of the following documents to accompany the appeal statement: the petitioner's 
U.S. federal tax returns for 2000, 2001 and 2002; bank account statements; and, financial statements. 
In determining the petitioner's ability to pay the proffered wage during a given period, U.S. 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. Counsel asserts that the petitioner employed the beneficiary 
since 2000. Approximately fifty-seven cancelled checks dated from June 21, 2002 to June 20, 2003 payable 
to the beneficiary. In 2002, $1 1,200.00 was paid. In 2003, $13,200.00 was paid. No other probative evidence 
concerning wages was submitted. 
Alternatively, in determining the petitioner's ability to pay the proffered wage, CIS will examine the net 
income figure reflected on the petitioner's federal income tax return, 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 , (9th Cir. 
1984) ); see also Chi-Feng Chang v. Thornburgh, 7 19 F.Supp. 532 (N.D. Texas 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 571 (7th Cir. 1983). In K.C.P. Food Co., Inc. v. Sava, the court held that the Service 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. Supra at 1084. The court specifically rejected the argument that CIS should have 
considered income before expenses were paid rather than net income. Finally, no precedent exists that would 
allow the petitioner to "add back to net cash the depreciation expense charged for the year." Chi-Feng Chang 
v. Thornburgh, Supra at 537. See also Elatos Restaurant Corp. v. Sava, Supra at 1054. 
The tax returns demonstrated the following financial information concerning the petitioner's ability to pay the 
proffered wage of $24,960.00 per year from the priority date of March 2,2000: 
Page 4 
In 2000, the Form 1 120s stated taxable income of $20,484.00. 
In 2001, the Form 1120s stated taxable income of $20,878.00. 
In 2002, the Form 1120s stated taxable income loss of $4,787.00. 
The petitioner's net current assets can be considered in the determination of the ability to pay the proffered 
wage especially when there is a failure of the petitioner to demonstrate that it has taxable income to pay the 
proffered wage. 
In 2002, the Form 1120s stated taxable income loss of $4,787.00. In 2002, $1 1,200.00 was paid. The 
proffered wage is $24,960.00 per year. The sum of these two figures is less than the proffered wage. 
In the subject case, as set forth above, the petitioner did not have taxable income sufficient to pay the 
proffered wage at any time between the years 2000 through 2002 for which the petitioner's tax returns are 
offered for evidence. 
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 liabilitiex2 A 
corporation's year-end curre'nt assets are shown on Schedule L, lines 1 through 6. That schedule is included 
with, as in this instance, the petitioner's filing of Form 1120s federal tax return. The petitioner's year-end 
current liabilities are shown on lines 16 through 18. If a corporation's end-of-year net current assets are equal 
to or greater than the proffered wage, the petitioner is expected to be able to pay the proffered wage. 
Examining the Form 1120s U.S. Income Tax Returns submitted by the petitioner, Schedule L found in each 
of those returns indicates the following: 
In 2000, petitioner's Form 1120s return stated current assets of $44,983.00 and $71,914.00 in current 
liabilities. Therefore, the petitioner had <$26,93 1.00> in net current assets. Since the proffered wage 
is $24,960.00 per year, this sum is less than the proffered wage. 
In 2001, petitioner's Form 1120s return stated current assets of $37,200.00 and $72,974.00 in current 
liabilities. Therefore, the petitioner had <$35,774.00> in net current assets. Since the proffered wage 
is $24,960.00 per year, this sum is less than the proffered wage. 
In 2002, petitioner's Form 1120s return stated current assets of $52,005.00 and $108,107.00 in 
current liabilities. Therefore, the petitioner had <$56,102.00>~ in net current assets. 
 Since the 
proffered wage is $24,960.00 per year, this sum is less than the proffered wage. 
Therefore, for the period 2000 through 2002 from the date the Form ETA 750 was accepted for processing by 
the U. S. Department of Labor, 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 its net current assets. 
2 
 According to Barron's Dictionary of Accounting Terms 1 17 (3rd 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 as accounts 
payable, short-term notes payable, and accrued expenses (such as taxes and salaries). Id. at 118. 
3 
 The symbols <a number> indicate a negative number, or in the context of a tax return or other financial 
statement, a loss, that is below zero. 
Page 5 
Counsel asserts in his brief accompanying the appeal that there are other ways to determine the petitioner's 
ability to pay the proffered wage from the priority date. According to regulation,4 copies of annual reports, 
federal tax returns, or audited financial statements are the means by which petitioner's ability to pay is 
determined. 
Counsel contends that the net income of petitioner, that is in 2000, $20,484.00, in 2001, $20,878.00, and in 
2002, $4,787.00, evidence of the petitioner's ability to pay the proffered wage. Since the proffered wage is 
$24,960.00 per year, the net income stated by the petitioner is less than the proffered wage. 
Counsel offers the petitioner's bank account statements. Counsel's reliance on the balances in the petitioner's 
bank account is misplaced. First, bank statements are not among the three types of evidence, enumerated in 8 
C.F.R. 3 204.5(g)(2), required to illustrate a petitioner's ability to pay a proffered wage. Whlle 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. fj 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 fimds that were not 
reflected on its tax return, such as the cash specified on Schedule L that will be considered below in determining 
the petitioner's net current assets. 
Counsel submits compiled financial statements for the period January through November 2003 as evidence of 
the ability to pay the proffered wage. Counsel cites no legal precedent for the admissibility of the compiled 
financial statement, and, according to regulation,5 copies of annual reports, federal tax returns, or audited 
financial statements are the means by which petitioner's ability to pay is determined. 
A compilation is limited to presenting in the form of financial statements information that is the 
representation of management. An audit is conducted in accordance with generally accepted auditing 
standards to obtain reasonable assurance whether the financial statements of the business are free of material 
misstatement. A compilation is the management's representation of its financial position. It is the lowest 
level of financial statements. Evidence of the ability to pay shall be, inter alia, in the form of copies of 
audited financial statements with a declaration of the maker indicating their manner of preparation and 
certifying the financial statements to be audited. Non-audited financials have limited evidentiary weight in 
Service deliberations in these matters. The statements presented were not audited. 
The accounting service that prepared the financial statement in a cover letter dated January 12, 2004 to that 
report qualified the financial statement as follows: 
Management has elected to omit the statement of retained earnings and the statement of 
cash flows and substantially all of the disclosures and statement of cash flows by generally 
accepted accounting principles. If the omitted statements and disclosures were included in 
these financial statements, they might influence the user's conclusions about the 
company's financial position, results of operations. Accordingly, these financial 
statements are not designated for those who are not informed about such matters. 
- - -- - 
8 C.F.R. 3 204.5(g)(2). 
' 8 C.F.R. 204.5(g)(2). 
Page 6 
In a generally accepted accounting principles (GAAP) based cash flow statement, the sources of cash are 
disclosed. The general categories are cash received from operations, investments and borrowings. Other 
sources of cash can be from the sale of stock or the sale of assets. A cash flow statement, used with the 
balance sheet and income statement, present an analysis of the financial health of a business. With important 
data withheld by petitioner, and, the accountants curtailed to produce only a compiled report, the statement 
can have little probative value in the determination of the ability to pay the proffered wage. Retained earnings 
are the total of a company's net earnings since its inception, minus any payments made to stockholders. That 
is, this year's retained earnings are last year's retained earnings plus this year's net income. 
The evidence submitted does not establish that the petitioner had the continuing ability to pay the proffered 
wage beginning on the priority date 
Counsel's contentions cannot be concluded to outweigh the evidence presented in the three corporate tax 
returns as submitted by petitioner that shows that the petitioner has not demonstrated its ability to pay the 
proffered wage from the day the Form ETA 750 was accepted for processing by any office within the 
employment system of 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. 
$ 1361. The petitioner has not met that burden. 
ORDER: The appeal is dismissed.