sustained EB-3 Case: Automotive Repair

identifying data deleted to 
prevent clearly unwarranted 
invasion of personal privacr 
U.S. Department of Ilomeland Security 
20 Mass. Ave., N.W., Rm. 3000 
Washington, DC 20529 
U. S. Citizenship 
and Immigration 
Services 
PUBLIC COPY 
FILE: 
 Office: TEXAS SERVICE CENTER Date: 
 AUG 1 4 2007 
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 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. 
Robert P. Wiemann, Chief 
Administrative Appeals Office 
DISCUSSION: The preference visa petition was denied by the Director, Texas Service Center, and is now 
before the Administrative Appeals Office (AAO) on appeal. The appeal will be sustained. The petition will 
be approved. 
The petitioner is an auto painting and repairing shop. It seeks to employ the beneficiary permanently in the 
United States as an automotive painter. As required by statute, the petition is accompanied by a ETA Form 
9089, Application for Permanent Employment Certification (ETA Form 9089), approved by the Department 
of Labor (DOL). 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. 
The record shows that the appeal is properly filed, timely and makes a specific allegation of error in law or 
fact. The procedural history in this case is documented by the record and incorporated into the decision. 
Further elaboration of the procedural history will be made only as necessary. 
As set forth in the director's March 8, 2006 denial, the only issue in this case is whether or not the petitioner 
has the 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. tj 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 nature, for which qualified workers are not available in the United 
States. 
The regulatory scheme governing the alien labor certification process contains certain safeguards to assure 
that petitioning employers do not treat alien workers more favorably than U.S. workers. New DOL 
regulations concerning labor certifications went into effect on March 28, 2005. The new regulations are 
referred to by DOL by the acronym PERM. See 69 Fed. Reg. 77325, 77326 (Dec. 27, 2004). The PERM 
regulation was effective as of March 28, 2005, and applies to labor certification applications for the 
permanent employment of aliens filed on or after that date. Thus, PERM applies to the instant case. 
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 ETA Form 9089 was accepted for processing by any office within the employment 
system of the U.S. DOL. See 8 C.F.R.. tj 204.5(d). The petitioner must also demonstrate that, on the priority 
date, the beneficiary had the qualifications stated on its ETA Form 9089 as certified by the U.S. DOL and 
submitted with the instant petition. Matter of Wing's Tea House, 16 I&N Dec. 158 (Act. Reg. Comrn. 1977). 
Page 3 
Here, the ETA Form 9089 was accepted on September 24, 2005. The proffered wage as stated on the ETA 
Form 9089 is $423.200 per week ($22,006.40 per year). The ETA Form 9089 states that the position requires 
two years of experience in the job offered. 
The AAO takes a de novo look at issues raised in the denial of this petition. See Dor v. INS, 891 F.2d 997, 
1002 n. 9 (2d Cir. 1989)(noting that the AAO reviews appeals on a de novo basis). The AAO considers all 
1 
pertinent evidence in the record, including new evidence properly submitted upon appeal . On appeal counsel 
submits the petitioner's Form 1 120S, U.S. Income Tax Return for an S Corporation for 2005. Other relevant 
evidence in the record includes the petitioner's Form 1 120, U.S. Corporation Income Tax Return for 2004 and 
its financial statements for the period from January 1, 2005 to September 30, 2005. The record does not 
contain any other evidence relevant to the petitioner's ability to pay the wage. 
The petitioner claimed to have been established in 2002, to have a gross annual income of $139,383, and to 
currently employ 1 worker. According to the tax returns in the record, the petitioner's fiscal year is based on 
a calendar year. On the ETA Form 9089, the beneficiary did not claim to have worked for the petitioner. 
On appeal, counsel asserts that the petitioner had the ability to pay the proffered wage at the time the priority 
date was established and submits the petitioner's 2005 tax return to support his assertions. 
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, 9 204.5(g)(2). In 
evaluating whether a job offer is realistic, Citizenship and Immigration Services (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. 6 12 (Reg. Comrn. 1967). 
In determining the petitioner's ability to pay the proffered wage during a given period, 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 submit any evidence to show that the petitioner paid the beneficiary any 
amount of compensation in the relevant years. Thus, the petitioner failed to establish its ability to pay the 
proffered wage through wages paid to the beneficiary from 2005 onwards. 
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) 
1 
The submission of additional evidence on appeal is allowed by the instructions to the Form I-290B, which 
are incorporated into the regulations by the regulation at 8 C.F.R. tj 103.2(a)(l) and the record in the instant 
case provides no reason to preclude consideration of any of the documents newly submitted on appeal, See 
Matter of Soriano, 19 I&N Dec. 764 (BIA 1 988). 
(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 its gross income and gross profit is misplaced. Showing that the petitioner's total income 
exceeded the proffered wage is insufficient. Similarly, showing that the petitioner paid wages in excess of the 
proffered wage is insufficient. 
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, as stated on the petitioner's 
corporate income tax returns, rather than the petitioner's gross income. Reliance on the petitioner's 
depreciation in determining its ability to pay the proffered wage is misplaced. The court in K.C.P. Food Co., 
Inc. v. Sava specifically rejected the argument that the Service should have considered income before 
expenses were paid rather than net income. The court in Chi-Feng Chang further noted: 
Plaintiffs also contend the depreciation amounts on the 1985 and 1986 returns are non-cash 
deductions. Plaintiffs thus request that the court sua sponte add back to net cash the 
depreciation expense charged for the year. Plaintiffs cite no legal authority for this 
proposition. This argument has likewise been presented before and rejected. See Elatos, 632 
F. Supp. at 1054. [CIS] and judicial precedent support the use of tax returns and the net 
income figures in determining petitioner's ability to pay. Plaintiffs' argument that these 
figures should be revised by the court by adding back depreciation is without support. 
(Emphasis in original.) Chi-Feng at 537. 
The record contains the petitioner's Form 1120 U.S. Corporation Tax Return for 2004, unaudited financial 
statements for January through September 2005, and Form 1120s U.S. Income Tax Retum for an S Corporation 
for 2005 as evidence of the petitioner's ability to pay the proffered wage. However, the petitioner's tax return for 
2004 is not necessarily dispositive since the priority date in the instant case is September 24, 2005. Counsel's 
reliance on unaudited financial records is misplaced. The regulation at 8 C.F.R. 9 204.5(g)(2) makes clear that 
where a petitioner relies on financial statements to demonstrate its ability to pay the proffered wage, those 
financial statements must be audited. As there is no accountant's report accompanying these statements, the 
AAO cannot conclude that they are audited statements. Unaudited financial statements are the representations 
of management. The unsupported representations of management are not reliable evidence and are 
insufficient to demonstrate the ability to pay the proffered wage. Therefore, the AAO will review the 
petitioner's tax return for 2005, the year of the priority date. The petitioner's 2005 tax return shows that the 
petitioner was incorporated in 2002 and elected as an S corporation on January 1, 2005. The tax return for 
2005 demonstrates the following financial information concerning the petitioner's ability to pay the proffered 
wage of $22,006.40 per year from the priority date: 
In 2005, the Form 1120s stated a net income2 of $52,864. 
2 
 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 1120s. 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, net income is found on 
Schedule K. The Schedule K form related to the Form 1120s states that an S corporation's total income from 
its various sources are to be shown not on page one of the Form 1120S, but on line 23 or line 17e of the 
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Therefore, for 2005, the year of the priority date, the petitioner had sufficient net income to pay the proffered 
wage that year. 
The record before the director in the instant case closed on February 23, 2006 with the receipt by the director 
of the petitioner's submission of the response to the notice of intent to deny (NOID) dated February 9, 2006. 
As of that date the petitioner's federal tax return for 2006 was not due yet. Therefore, the petitioner's tax 
return for 2005 is the most recent available tax return to be considered in determining the petitioner's ability 
to pay the proffered wage. 
Therefore, from the date the ETA Form 9089 was accepted for processing by the U. S. DOL, the petitioner 
has established that it had the ability to pay the beneficiary the proffered wage as of the priority date in 2005 
through an examination of wages paid to the beneficiary or its net income. 
Counsel's assertions on appeal have overcome the director's finding in her decision to deny the petition. The 
evidence newly submitted on appeal establishes that the petitioner had the continuing ability to pay the 
proffered wage beginning on the priority date. 
The burden of proof in these proceedings rests solely with the petitioner. Section 291 of the Act, 8 U.S.C. 
9 136 1. The petitioner has met that burden. 
ORDER: The appeal is sustained. The petition is approved. 
Schedule K, Shareholders' Shares of Income, Credits, Deductions, etc. 
 See Internal Revenue Service, 
Instructions for Form 1 120s (2003), available at http://www.irs.gov/pub/irs-priorli 1 120s--2003 .pdf; 
Instructions for Form 1120s (2002)' available at http://www.irs.gov/pub/irs-prior/i1120s--2002.pdf.