remanded EB-3 Case: Jewelry

U.S. Department of Homeland Security 
20 Mass. Ave. N.W., Rm. 3000 
Washington DC 20529 
U.S. Citizenship 
and Immigration 
Services 
BL 
IN RE: 
PETITION: 
 Immigrant Petition for Alien Worker as an Slulled Worker or Professional Pursuant to 
Section 203(b)(3) of the Immigration and Nationality Act, 8 U.S.C. 9 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. 
Administrative Appeals Office 
DISCUSSION: The employment based visa petition was denied by the Director (director), Texas Service Center 
and is now before the Administrative Appeals Office (AAO) on appeal. The case will be remanded for further 
investigation and entry of a new decision. 
The petitioner is a jewelry store. It seeks to employ the beneficiary permanently in the United States as a jeweler. 
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. 
On appeal, counsel maintains that the petitioner has established its continuing ability to pay the proffered wage. 
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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 this paragraph, of performing slulled 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. 
r 
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 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 priority date, the 
day the Form ETA 750 was accepted for processing by any office within the employment system of the Department 
of Labor. See 8 CFR 9 204.5(d). Here, the Form ETA 750 was accepted for processing on April 30, 2001. The 
proffered wage as stated on the Form ETA 750 is $38,875 per year. The ETA 750B, signed by the beneficiary on 
April 26,2001, does not indicate that the petitioner has employed the beneficiary. 
On Part 5 of the visa petition, filed on January 18, 2005, the petitioner claims that it was established in 1989, has one 
employee and declares $192,000 as a gross income. 
The petitioner is structured as a sole proprietorship. Because the petitioner submitted insufficient information 
regarding the petitioner's ability to pay the proffered wage, the director issued a notice of intent to deny on ~ebruary 
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14, 2005 and on March 18, 2005. The director sought copies of the petitioner's federal income tax returns for 2002 
and 2003 in addition to the 2001 return that had been provided, as well as an explanation of any wages or 
compensation paid to the petitioner's one employee. The petitioner's response included copies of the requested tax 
returns and further indicated that the sole prbprietor IS the only employee of the business and simply declares the net 
profit as his income on his individual tax return. The 2001,2002, and 2003 Form 1040, U.S. Individual Income Tax 
Return(s) indicate that the sole proprietor filed jointly with his spouse and declared one dependent. The tax returns 
also contain the following information: 
200 1 2002 2003 
Gross Receipts or Sales (Sched. C 
Profit or Loss from Business) $ 192,730 $179,560 $246,242 
Gross Income (Sched. C) $ 99,996 $ 99,415 $135,240 
Total Expenses (Sched. C) $ 71,603 $ 77,162 $104,744 
Net profit or (loss) (Sched. C & Form 1040) $ 28,393 $ 22,253 $ 30,496 
Adjusted Gross Income (Form 1040) $ 24,027 $ 17,683 $ 21,656 
It is further noted that the sole proprietor received some of his income as interest income. In addition to the tax 
returns, the petitioner provided a letter, dated March 2, 2005, from its accountant, 
tates that the majority of profits realized by the business in excess of living 
inventory. 
The director denied the petition on March 30, 2005. 
 She concluded that the petitioner failed to establish its 
continuing ability to pay the proffered wage, determining that the petitioner was not employed by the beneficiary 
and that the proffered wage exceeded the sole proprietor's adjusted gross income. 
On appeal, counsel noted that the director had erroneously referred to "Schedule L" in her decision and that the 
"assets and liabilities" of the petitioning business are encompassed within the figures on Schedule C, Profit or Loss 
from Business. Counsel also claims that the director should have requested to submit evidence of individual assets 
and living expenses. 
Although the director noted the sole propnetor's modest reported adjusted gross income, because there is evidence 
of possible additional liquid assets, the AAO concurs with counsel in remanding the case to the director for 
consideration of addition individual assets that may have been available to pay the proffered wage. It is noted that 
CIS will first examine whether the petitioner may have 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. 
 Wages less than the proposed wage offer will also be given relevant consideration. In this matter, no 
evidence of employment or payment of wages to the beneficiary was provided. 
If the petitioner does not establish that it may have 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 
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returns as a basis for ldetermining 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). 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. The court specifically rejected the argument that the Service should have considered 
income before expenses were paid rather than net income. 
When a petitioner is a sole proprietorship, additional factors will be considered. A sole proprietorship is a business 
in which one person operates the business in his or her personal capacity. Black's Law Dictionary 1398 (7th Ed. 
1999). Unlike a corporation, a sole proprietorship does not exist as an entity apart from the individual owner. See 
Matter of United Investment Group, 19 I&N Dec. 248,250 (Comm. 1984). Therefore the sole proprietor's adjusted 
gross income, 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 (line' 12). Sole proprietors must show that they can cover their existing business expenses 
as well as pay the proffered wage out of their adjusted gross income or other available funds. In addition, sole 
proprietors 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 (7fi Cir. 1983). Such petitions often include a summary of household expenses 
of the sole proprietor. 
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 or approximately thirty percent (30%) of the 
petitioner's gross income. 
In the instant case, as noted above, in each of the relevant years, the proffered wage of $38,875 exceeded the sole 
proprietor's adjusted gross income. Although it is difficult to see how the proffered wage as well as the living 
expenses of the sole proprietor and his family may be supported, the case will be remanded to the director to 
spkcifically query the petitioner as to any credible documentation of individual cash or cash equivalent assets that 
would have been readily available to pay the proffered wage. The director should also solicit a summary of the sole 
proprietor's family living expenses to be included in the calculation. 
In view of the foregoing, the previous decision of the director will be withdrawn. The petition is remanded to the 
director to conduct further investigation and request any additional evidence from the petitioner pursuant to the 
requirements of 8 C.F.R. 5 204.5(g)(2). Similarly, the petitioner may provide additional evidence within a 
reasonable period of time to be determined by the director. Upon receipt of all the evidence, the director will 
review the entire record and enter a new decision. 
ORDER: 
 The director's decision is withdrawn. The petition is remanded to the director for 
further action consistent with the foregoing and entry of a new decision.