remanded EB-3 Case: Architecture

identifying data deleted to 
prevent dearly unwarranted 
invasion of personal privacy 
PUBLIC copy 
U.S. Department of Homeland Security 
20 Mass. Ave., N.W., Rrn. A3042 
Washington, DC 20529 
U.S. Citizenship 
and Immigration 
a. ''st 
FILE: WAC 04 122 50789 Office: CALIFORNIA SERVICE CENTER Date: MAR 2 4 2006 
IN RE: 
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. 8 11530>)(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 
WAC 04 122 50789 
Page 2 
DISCUSSION: The preference visa petition was denied by the Director, California Service Center, and is 
now before the Administrative Appeals Office (AAO) on appeal. The appeal will be remanded. 
The petitioner is an architecture firm. It seeks to employ the beneficiary permanently in the United States as 
an architectural drafter. As required by statute, a Form ETA 750, Application for Alien Employment 
Certification, approved by the Department of Labor, accompanies 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. The director denied the petition accordingly. 
On appeal, counsel submits: 
A brief; 
The petitioner's Form 1120s for 2003; and, 
The petitioner's owner's Form 1040 for 2002 and 2003. 
The regulation 8 C.F.R. tj 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 CFR 
tj 204.5(d). 
Here, the Form ETA 750 was accepted on April 5,2001. The proffered wage as stated on the Form ETA 750 
is $1 8.74 per hour ($38,979.20 per year). 
The evidence in the record of proceeding shows that the petitioner was structured as a sole proprietorship in 
2001 and in part of 2002, as a C-corporation in part of 2002, and as an S-corporation in 2003. On the petition, 
the petitioner claimed to have been established in 1997, to have a gross annual income of $367,669, and to 
currently employ three workers. On the Form ETA 750B, signed by the beneficiary on March 27, 2001, the 
beneficiary claimed to have worked for the petitioner since September 1998. 
With the petition, the petitioner submitted the following documents: 
Counsel's G-28; 
The original certified ETA 750; 
Counsel's advice that the petitioner changed from sole proprietorship to C corporation on August 24, 
200 1 ; 
The petitioner's Form 1040 for 200 1, and the petitioner's Form 1 120-A for 2002; 
Certified copies of pages from the petitioner's articles of incorporation; and, 
The beneficiary's Form 1099 MISC for 2001,2002 and 2003. 
WAC 04 122 50789 
Page 3 
The director denied the petition on September 7, 2004, finding that the evidence submitted with the petition 
did not establish that the petitioner had the continuing ability to pay the proffered wage beginning on the 
priority date. 
The director found that for 2001, the petitioner was a sole-proprietor business and must demonstrate his 
ability to pay both the pro-rated proffered wage of $29,984, and the owner's yearly household expenses, 
imputed at $15,260 under Federal Poverty Guidelines for a family of three, for a total of $45,244. Starting 
with the petitioner's $37,980 in adjusted gross income, the director deducted $15,260 in household expenses, 
leaving the petitioner with only $22,720 with which to pay the pro-rated proffered wage of $29,984. The 
director, noting the beneficiary's Form 1099 MISC showed he received $26,875 for the year,' and determined 
that the $22,750 remaining of his net income after spending $15,260 on household expenses, would not cover 
the proffered wage he had to pay for 200 1. Accordingly, the director found that for 200 1, the petitioner had 
not established its ability to pay the proffered wage. 
The director stated that the petitioner's Form 1120-A for 2002 net income was -$3,098. He also found the 
beneficiary's wages from Form 1099 MISC for 2002 were $5,329.20 less than the proffered wage. 
Accordingly, the director found the petitioner had not established its ability to pay the proffered wage for 
2002. 
For 2003, the director found that the beneficiary's Form 1099 MISC wages were $429.20 below the proffered 
wage. Accordingly, the director found the petitioner had not established its ability to pay the proffered wage 
for 2003. 
On appeal, counsel states that for 2001 the petitioner's proffered wage obligation was $29,984, and after 
deducting $26,875 for wages paid to the beneficiary, the petitioner would only need to show it could pay the 
$3,109 difference between the wages paid and proffered wage. Counsel calculates the petitioner's available 
income for the year to be $37,980 in net income, and uses the director's determination of $15,260 in imputed 
expenses for a family of three, which leaves a surplus of $22,750, more than enough to pay the $3,109. 
Counsel asserts the director disregarded the beneficiary's wages for 2001, which was included as "Outside 
Labor" expense on the petitioner's Form 1040 Schedule c.~ 
For 2002, counsel asserts that the petitioner operated as a sole proprietor and "started activating his business 
under the corporation - OML Consultants, Inc., which was dormant until September 2002.~ Referring to the 
petitioner's Form 1040 for 2002, counsel notes an adjusted gross income of $57,254, and asserts the petitioner 
paid the beneficiary's total salary out of the sole proprietorship accounts, referring to the "two 1099 forms 
totaling $33,560."~ Counsel asserts, therefore, that the petitioner has established its ability to pay the $39,979 
proffered wage by applying the entire $33,650 in wages the beneficiary received, leaving a deficit of $5,329, 
which the petitioner has the ability to pay from his $57,254 in adjust gross income, even accounting for the 
petitioner's yearly household expense of $15,260. 
I 
 It does not appear that the director figured in the beneficiary's wages received in 2001 in determining the petitioner's 
ability to pay. 
2 
 Schedule C lists $198,613 in expenses total for "Outside Services." 
3~chedule D of the petitioner's California corporate income tax return for 2002 indicates the corporation began doing 
business October 1, 2002. 
4 
It is noted that the beneficiary's Form 1099 for 2002 listing $23,560 in wages was from the petitioner as sole proprietor 
while the other $10,000 was from the petitioner as corporation. Counsel notes Schedule C from the petitioner's Form 
1040 for 2002 lists $198,613 in labor expenses under "Outside Services." We note, however, that the petitioner as a C- 
corporation also lists $84,093 spent on "Outside Services" on Statement 1 of its Form 1120-A. 
WAC 04 122 50789 
Page 4 
For 2003, counsel asserts that the petitioner's Form 1 120s shows gross income of $1,092,2 17, and ordinary 
income of $105,784, from which the petitioner paid the beneficiary $38,550, which left the petitioner with a 
deficit of only $429.20 below the proffered wage, which counsel asserts it could pay out of its $105,785 net 
income. 
Unlike a corporation, a sole proprietorship is not legally separate from its owner. 
 Therefore the sole 
proprietor's income, liquefiable assets, and personal liabilities are also considered as part of the petitioner's 
ability to pay. Sole proprietors report income and expenses from their businesses on their individual (Form 
1040) federal tax return each year. The business-related income and expenses are reported on Schedule C and 
are carried forward to the first page of the tax return. Sole proprietors must show that they can cover their 
existing business expenses as well as pay the proffered wage. In addition, they must show that they can 
sustain themselves and their dependents. Ubeda v. Palmer, 539 F. Supp. 647 (N.D. Ill. 1982), afd, 703 F.2d 
571 (7th Cir. 1983). 
In Ubeda, 539 F. Supp. at 650, the court concluded that it was highly unlikely that a petitioning entity 
structured as a sole proprietorship could support himself, his spouse and five dependents on a gross income of 
slightly more than $20,000 where the beneficiary's proposed salary was $6,000 (approximately thirty percent 
of the petitioner's gross income). 
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 establish that it 
employed and paid the beneficiary the full proffered wage in 2001,2002 or 2003. 
Instead, the petitioner paid partial wages in the amounts of $26,875 in 2001, $33,650 in 2002, and $38,550 in 
2003. The petitioner is obligated to demonstrate that it could pay the difference between the wages actually 
paid to the beneficiary and the proffered wage. Additionally, during the periods the petitioner operated as a 
sole proprietor, in 2001 and 2002, the petitioner must show he could support his family of three. 
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. 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., 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). 
Reliance on the petitioner's gross receipts and wage expense is misplaced. Showing that the petitioner's 
gross receipts exceeded the proffered wage is insufficient. Similarly, showing that the petitioner paid wages 
in excess of the proffered wage is insufficient. 
The record contains copies of Form W-2 Wage and Tax Statements and Form 1099 MISC showing wages the 
beneficiary received from the petitioner, as shown in the table below. 
WAC 04 122 50789 
Page 5 
Year Proffered Wane Wages Paid Difference 
The petitioner's tax returns show the amounts for taxable income as shown in the table below. 
Tax Net Difference Surplus 
Year Income ProfferedIPaid 
The foregoing establishes that the petitioner had sufficient net income to pay the proffered wage in 2003, 
when it first operated as a Subchapter S corporation. In 2001, when it operated as a sole proprietorship, the 
evidence is unclear, without more evidence, to show that the petitioner would be able to support a family of 
three on $25,876 in Los Angeles, California. In 2002, while the petitioner operated as sole proprietor through 
September 30, he earned sufficient net income to support a family of three. When the petitioner operated as a 
C-corporation for the last three months, the evidence shows the petitioner paid the beneficiary at a rate 
slightly more than the proffered wage. 
In view of the foregoing, the previous decision of the director will be withdrawn. The petition is remanded to 
the director consideration of the issue set for concerning the petitioner's ability to pay the proffered wage for 
2001. The director may request any additional evidence considered pertinent. Upon receipt of all the 
evidence, the director will review the entire record and enter a new decision. 
5 
Counsel requests that CIS prorate the proffered wage for the portion of the year that occurred after the priority date. We 
will not, however, consider 12 months of income towards an ability to pay a lesser period of the proffered wage any 
more than we would consider 24 months of income towards paying the annual proffered wage. While CIS will prorate 
the proffered wage if the record contains evidence of net income or payment of the beneficiary's wages specifically 
covering the portion of the year that occurred after the priority date (and only that period), such as monthly income 
statements or pay stubs, the petitioner has not submitted such evidence. 
6 
We determine the petitioner's ability to pay the proffered wage in two phases during 2002, when the petitioner operated 
first as a sole proprietorship and then as a C corporation. We allocate the wages paid according to the two Form 1099 
MISC for 2002, which indicate the wages the petitioner paid as a sole proprietor and as a corporation. 
'"~ot Applicable." 
WAC 04 122 50789 
Page 6 
ORDER: 
 The director's decision is withdrawn. The petition is remanded to the director for further 
action in accordance with the foregoing and entry of a new decision, which, if adverse to the 
petitioner, is to be certified to the AAO for review.