sustained EB-3 Case: Automotive Repair

U.S. Department of Homeland Security 
20 Mass. Ave., N.W., Rm. A3042 
Washington, DC 20529 
tdlen~lfng data. deleted to 
 U.S. Citizenship 
@@vent clearly unwarranted 
 and Immigration 
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COPY 
ffice: CALIFORNIA SERVICE CENTER Date: HAk? 2 1 ' 2006 
WAC 03 037 50524. 
IN RE: Petitioner: 
Beneficiary: 
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PETITION: 
 Immigrant petition for Alien Worker as a Skilled Worker or Professional pursuant to section 
203(b)(3) of the Immigration and ~ationalit~ 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 
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the office that originally decided your case. Any further inquiry must be made to that office. 
~obert P. Wiemann, Director 
Administrative Appeals Office 
DISCUSSION: The service center director denied the employment-based visa petition, and a subsequent 
motion to reopen was subsequently denied. The matter is now before the Administrative Appeals Office 
(AAO) on appeal. The appeal will be sustained. The petition will be approved. 
The petitioner is an automobile body repair company. It seeks to employ the beneficiary permanently in the 
United States as an automobile body repairer. 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. Accordingly, the director denied the 
petition. 
On appeal, the petitioner submits additional documentation. 
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Section 203(b)(3)(A)(i) of the Immigration and Nationality Act (the Act), 8 U.S.C. .§ 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 regulation at 8 C.F.R. 204.5(g)(2) states, in pertinent part: 
~bilit~ of prospective employer to pay wage. Any petition filed by or for an emploiment- 
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, 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 $ 204.5(d). Here, the Form ETA 750 was accepted for processing on 
January 20, 1998. The proffered wage as stated on the Form ETA 750 is $18.63 an hour, or an annual salary 
of $38,750.40. On the Form ETA 750B, signed by the beneficiary, the beneficiary claims to have worked for 
the petitioner since May 1995. 
The petitioner is structured as a sole proprietorship. On the petition, the petitioner claims to have been 
established in April 1978, to have six employees, and did not indicate any gross or net annual income. The 
petitioner appears to have submitted a letter of employment verification from acoima, 
California, that stated the beneficiary worked as a body repairer from February 1993 to May 1995. The 
petitioner also submitted a letter offering the beneficiary a job and describing the job duties and salary. In 
addition, the petitioner also submitted its Forms 1040, individual income tax return, for tax years 2000 and 
2001. These documents indicated that the petitioner had an adjusted gross income of $58,177 in 2001 and 
$1 17,145 in 2000. 
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Because the director deemed the evidence submitted insufficient to demonstrate the petitioner's continuing 
ability to pay the proffered wage beginning on the priority, date, on April 30, 2003, the director requested 
additional evidence pertinent to that ability. The director stated that the petitioner could establish its ability to 
pay the proffered wage by submitting annual reports federal tax returns, with all schedules and attachments, 
or audited financial statements. The director specifically requested that the petitioner provide such evidence 
for the years 1998 to the present, excluding the already submitted tax returns for 2000 and 2001. 
In response, the sole proprietor submitted an incomplete 1998 federal tax return, which consisted of Schedule 
C, along with Schedule D, Form 4562, and attachments with regard to depreciation issues. The sole proprietor 
also submitted its complete federal tax return for tax year 1999, and a Form 4868 that indicated the petitioner 
requested an automatic extension of time to file its 2002 tax retuh. The petitioner also submitted its state of 
California,tax returns with its federal returns.' The 1999 tax return indicates that the petitioner had two 
dependents besides himself in 1999 and an adjusted gross income of $71,498. 
On July 28, 2003, the director sent a second request for further evidence to the petitioner. The director 
requested that the petitioner resubmit its federal tax returns, excluding the years 1998 and 2002. The director 
also requested the petitioner submit Forms W-3, Transmittal of Wage and Tax Statements to establish the 
wages paid to its employees from 1998 to 2002. The director also requested the beneficiary's W-2 Forms 
from 1998 to 2002. Finally the director requested that the petitioner submit copies of its current valid city, 
county, state, and federal business licenses. 
On September 15, 2003, the petitioner submitted its federal income tax returns from 1998 to 2002.~ The 
petition also submitted its W-3 Forms for the years 1998, 1999, 2000, 2001, and 2002. Finally the petitioner 
submitted a business license issued by the Bureau of Automotive Repair, Licensing Unit, in Sacramento, 
California. September. With regard to the beneficiary's W-2 Forms, the petitioner stated that he paid the 
beneficiary in cash since the beneficiary began working for the petitioner. The petitioner stated that after the 
beneficiary received his work authorization card, he would then be placed on the petitioner's payroll. 
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On November 17, 2003, the director sent a third request for further evidence to the petitioner. The director 
stated that the petitioner had submitted its tax returns for 1998 to 2002, but had not established its ability to 
pay the beneficiary's wage from the priority to the present. The director also stated that the petitioner was a 
sole proprietorship, and that the submitted tax documents indicate that the petitioner did not have enough 
income to support his household and pay the proffered wage. The director then requested that the petitioner 
submit a statement of monthly expenses for the petitioner's family that included all of the family's household 
living expenses to include but not be limited to housing, food, car payments, insurance, utilities, credit cards, 
student loans, clothing, school, daycare, gardener, housecleaner, nanny and any other reoccurring monthly 
Although the sole proprietor did not submit the first page of its 1998 federal tax return that indicates the 
sole proprietor's gross adjusted income, the state of California tax return on line 13 indicates the petitioner's 
adjusted gross income for 1998 is $50,761. 
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 The sole proprietor submitted only Schedule C of his 1998 Form 1040, and other schedules and 
attachments as described previously. 
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household expenses. The director also stated that if the sole proprietor would use personal assets to pay the 
proffered wage, the petitioner must submit evidence to verify that the petition possessed sufficient assets to, 
pay the proffered wage continuously. 
The director also requested the petitioner's Employment Development Department (EDD) Form DE-6, 
Quarterly Wage Reports, for all employees for the last four quarters accepted by the state of California, as 
well as IRS W-2 Form printouts from the beneficiary for the years 1998, 1999, 2000, 2001, and 2002. With 
regard to the beneficiary's qualifications, the director requested that the petitioner submit a complete ETA 
Form 750, that shows the beneficiary's amended experience section, dated October 25, 1999, and to submit a 
letter that the petitioner possesses the experience listed on the Form ETA 750.~ Finally, the director requested 
that the petitioner submit evidence to establish the beneficiary's arrival in the United States. 
In response, the petitioner submitted the requested statement of monthly expenses. This document indicated 
that the petitioner had monthly household expenses of $1,170, or yearly household expenses of $14,040. This 
document indicated that the petitioner paid no mortgage.4 The petitioner also submitted three DE-6 Forms for 
the last quarter of 2002, and the first and the third quarter of 2003. The DE-6 Form for the last quarter of 2002 
has only the first page of the two-page document, and does not list the beneficiary as an employee. The two 
documents for 2003 indicate that the petitioner paid the beneficiary $4,225 in the first quarter of 2003, and 
$3,925 in the third quarter. The petitioner also appears to have submitted a copy of the Form ETA 750. 
Finally the petitioner resubmitted its tax returns for the years 1998, 1999,2000,2001, and 2002.~ 
On May 7,2004, the director issued a Notice of Intent to Deny (NOID). The director noted that the petitioner 
had submitted its tax return for the years 1998; 1999,2000,2001 and 2002, with Schedules C for each year. 
The director also noted that the petitioner had not submitted a Form 1040 for its 1998 tax return; however, the 
director identified the petitioner's adjusted gross income for that year as $36,207.~ The director then listed the 
petitioner's adjusted gross income for tax years 1999 to 2002 as follows: $7 1,498 in 1999; $1 17,145 in 2000, 
$58,177 in 2001, and $57,409 in 2002. The director determined that the petitioner had not established its 
ability to either pay the beneficiary's proffered wage or the difference between the beneficiary's actual wages 
and the proffered wage. The director stated that if only considering the petitioner's adjusted gross income in 
As stated previously, the petitioner appears to have submitted a letter on letterhead from the beneficiary's 
previous employer. The Form ETA 750 indicates some corrections on Part B based on the petitioner's letter 
dated November 1999 that was also submitted apparently with the initial petition. The record is not clear why 
the director recpested'these materials. 
Although the petitioner claims no mortgage payments, the petitioner does pay mortgages on other 
properties. The rents and the mortgage payments, however, are indicated in other schedules in the petitioner's 
tax returns, and are not considered part of the petitioner's household yearly expenses. 
The sole proprietor's tax return for 1998 is not a complete Form 1040, although various schedules and 
attachments are submitted. 
As previously stated, the sole proprietor submitted part of its tax return for 1998. It did not submit the first 
page of the Form 1040 for the tax year 1998, although it did submit Schedule C and other pertinent schedules 
and attachments. 
' The figure the director identified as the sole proprietor's 1998 adjusted gross income is actually the sole 
proprietor's net profit identified on line 3 1 of the 1998 Schedule C. 
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the period of time in question, it was not reasonable to assume that the petitioner's household of two could 
live off the income remaining after the beneficiary' wages had be& subtracted from the petitioner's adjusted 
gross income. The director noted that any income that the petitioner earns, as a sole proprietor, must first be 
used to maintain the petitioner's cost of living. Any funds that remained after this was done could then be 
used to pay the beneficiary's wages. The director finally noted that if the sole proprietor would use personal 
assets to pay the wage, the petitioner had to submit evidence to verify that the sole proprietor possesses 
sufficient assets to pay the wage. 
On June 3, 2004, counsel responded to the director's Notice of Intent to Deny (NOID). He stated that line 26, 
Schedule C of the petitioner's tax returns, reflects wages paid to all employees, which includes the 
beneficiary. Counsel also noted that line 3 1 of the Schedule C reflects the net profit of the petitioner's 
business. Counsel states that the beneficiary is included in the Forms DE-6 submitted to the record and that 
his wages are already deducted from the net profit. Counsel submits copies of the sole proprietor's bank 
statements and also Forms DE-6. The DE-6 Form submitted for the last quarter of 2002 contains two pages. 
The second page indicates that the beneficiary earned $1,800 in the last quarter of 2002. The other DE-6 
Forms indicate the beneficiary earned $8,125 for the first and second quarters of 2003. With regard to the sole 
proprietor's bank statements, counsel submitted checking account statements from Bank of America for 
January to March 2004. 
On July 20, 2004, the director denied the petition. The director stated that the petitioner had submitted a 
Schedule C for the tax year 1998 and IRS Form 1040, for the tax years 1999 to 2002. The director then stated 
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that the 1998 Schedule C reflected an insufficient adjusted gross income of $36,200.~ The director then noted 
that the tax returns for tax years 2001 and 2002 reflected insufficient adjusted gross income of $58,177 and 
$57,409. The director also stated that the petitioner's adjusted gross income for 2001 and 2002 were both 
greater than the proffered wage; however, he also stated that it was not reasonable to assume that the 
petitioner and his wife could live off the amount of income remaining after the beneficiary's proffered wage 
was subtracted from the petitioner's adjusted gross income. The director identified the sums remaining in the 
tax years 200 1 and 2002 after the beneficiary's salary was paid as $19,426 and $18,658.60. The director then 
determined that the sole proprietorlpetitioner had not established its ability to pay the beneficiary the 
proffered wage and also pay for his household expenses. 
On appeal, the petitioner submits its Form 1040 for tax year 2003 that indicates the petitioner has an adjusted 
gross income of $63,370. The petitioner also resubmits its tax returns for 1998 to 2002.' He also submits the 
Forms W-3 Transmittal of Wages for tax years 1998 to 2001, as well as his previously submitted monthly 
expenses letter. Finally the petitioner submits copies of its Bank of America bank statements from December 
2003 to July 2004. 
On appeal, and in response to one of the director's request for further evidence, the petitioner submitted its 
bank statements. The petitioner's reliance on the balances in its bank account is misplaced. First, bank 
statements are not among the three types of evidence, enumerated in 8 C.F.R. fj 204.5(g)(2), required to illustrate 
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As stated previously, this figure is the petitioner's net profit for his business, not his adjusted gross income. 
It is noted again that the sole proprietor only provided Schedule C in tax year 1998. 
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a petitioner's ability to pay a proffered wage. While 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. 8 204.5(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. In 
addition, the bank statements from the sole proprietorlpetitioner's checking accounts do not cover the entire 
period of time in question from 1998 to the present time. Finally, the bank statements submitted on appeal 
that cover the period from December 2003 to July 2004 have an average monthly balance of $3,510. The 
average balance is not substantial enough to cover the full or remaining proffered wage as each month's 
balance could not alone support the full proffered wage for a year. 
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. Although the beneficiary claimed that the petitioner employed 
him since May 1995 on the Form ETA 750 submitted with the petition, the petitioner provided no further 
documentation of such employment from the priority date and to the end of 2003. The petitioner did provide 
copies of its DE-6 Forms for the last quarter of 2002 and the first three quarters of 2003. These documents 
'established that the petitioner paid the beneficiary $1,800 in tax year 2002, and $12,050 in 2003. Thus, 
although the petitioner documented that he had paid the beneficiary wages in 2002 and' 2003 these, wages 
were not equal to or greater than the proffered wage of $38,750.40. The petitioner also stated that he paid the 
beneficiary in cash and thus could not document any wages paid as of the 1998 priority date to tax year 2002. 
Thus, the petitioner did not employ or pay the beneficiary the proffered wage as of the 1998 priority date and 
to the present. 
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), afd, 703 F.2d 571 (7th Cir. 1983). 
The petitioner is a sole proprietorship, 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. 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), aff'd, 703 F.2d 571 (7'h Cir. 1983). 
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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 stated previously, the director requested that the petitioner submit a'list of reoccurring 
monthly expenses to better gauge the petitioner's household expenses and its ability to pay the proffered 
wage. The petitioner submitted a list that indicated the petitioner's monthly expenses were $1,170, for a 
yearly household expense of $14,040. In his decision, the director did not identify what figure he utilized 
when subtracting the petitioner's yearly household expenses from the petitioner's adjusted gross income. In 
these proceedings, the AAO considers the petitioner's yearly expenses as $14,040, and will use this figure in 
its examination of the petition. 
With regard to tax year 1998, the year in which the priority date was established, the sole proprietor did not 
submit a complete tax form to the record. The petitioner did however submit a Schedule C and other 
schedules and attachments for tax year 1998 to the record. The petitioner also has provided no explanation for 
why Form 1040 was not submitted. In his decision, the director incorrectly used the petitioner's net income 
listed on Schedule C in his examination of the petitioner's ability to pay the proffered wage. The AAO 
examines the petitioner's adjusted income on page 1 of the Form 1040, in its deliberations. It is noted that the 
petitioner's state of California Form 540 C1 does identify the petitioner's adjusted gross income as taken from 
the IRS Form 1040, Line 18, and does list the petitioner's daughter as a .dependent. The petitioner's 1998 
California state income tax return indicates the petitioner is married, has an adjusted gross income of $50,761, 
and has one daughter as a dependent. The petitioner's adjusted gross income minus the petitioner's yearly 
expenses of $14,040 would leave $36,721 to pay the proffered wage of $38,750.40. The petitioner lacks 
$2,029.40 to pay the proffered wage in tax year 1998. 
In tax year 1999, the sole proprietor supports himself, his wife and a daughter. The sole proprietor's adjusted 
gross income is $71,498. This sum, minus the petitioner's annual household expenses, totals $57,458. This 
sum is sufficient to pay the proffered wage of $38,750.40. 
In tax year 2000, 2001, 2003 and 2003, the sole proprietor supports only himself and his wife. The 
petitioner's adjusted gross income in tax year 2000 is $1 17,145. This sum, minus the petitioner's annual 
household expenses of $14,040, equals $103,105, which is sufficient to pay the beneficiary's proffered wage 
of $38,750.40. In tax year 2001, the sole proprietor has an adjusted gross income of $58,177. This sum, minus 
the petitioner's yearly expenses of $14,040, equals $44,137, which is sufficient to pay the proffered wage. In 
tax year 2002, the petitioner's adjusted gross income is $57,409. This adjusted gross income, minus the 
petitioner's yearly household expenses, equals $43,369, which is sufficient to pay the difference between the 
beneficiary's actual wages in 2002, and the proffered wage of $38,750.40, namely,~$36,950.4'0.'0 With regard 
to tax year 2003, the petitioner has adjusted gross income of $63,370. This figure, minus the petitioner's 
yearly expenses of $14,040, equals $49,330, which is sufficient again, to pay the difference between the 
beneficiary's actual wages and the proffered wage of $38,750.40, namely $26,700.40." Thus, the petitioner 
lo 
 Based on the petitioner's DE-6 Forms, the beneficiary earned $1,800 in the fourth quarter of 2002. 
l1 Based on the DE-6 Forms submitted to the record, the petitioner paid the beneficiary $12,050 in tax year 
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appears to have established its ability to pay the proffered wage in tax years 1999, 2000, 2001, 2002 and 
2003. Nevertheless, a petitioner must establish the elements for the approval of the petition at the time of 
filing. Matter of Katigbak, 14 I&N Dec. 45, 49 (Comm. 1971). As stated previously, the petitioner has to 
establish that it has the ability to pay the proffered wage as of the priority date that in.the instant petition is 
January 20, 1998. 
It is noted that the petitioner has been in business since 1978, has always shown a profit in its business 
operations in the period of time in question, and has provided evidence as to wages being paid to its 
employees. In viewing the totality of the petitioner's circumstances, the AAO can examine overall 
circumstances of the petitioner's business operations and the sole proprietor's financial viability. See Matter 
of Sonegawa, 12 I&N Dec. 612 (Reg. Comm. 1967). Since the petitioner has established that it has the ability 
to pay the proffered wage from 1999 to 2003, and the amount of financial resources missing that is needed to 
pay the proffered wage in 1998 is relatively small, the AAO finds that the petitioner has the financial viability 
to pay the proffered wage to the beneficiary as of the priority date and to the present. 
Therefore, the director's decision is withdrawn. The appeal is sustained. The petition is approved. 
The burden of proof in these proceedings rests solely with the petitioner. Section 291 of the Act, 8 U.S.C. 
5 1361. The petitioner,has met that burden. 
ORDER: The appeal is sustained. The petition is approved.