sustained EB-3 Case: Culinary Arts

identifying data deleted to 
prevent Wy unwarranted 
invasion of personal privacy 
U.S. Department of Homeland Security 
20 Mass, N.W. Rm. A3042 
Washington, DC 20529 
U.S. Citizenship 
and Immigration 
Services 
FILE: LIN 04 182 51 114 Office: NEBRASKA SERVICE CENTER Date: HAY 03 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. 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. 
~obert P. Wiemann, Chief 
Administrative Appeals Office 
LIN 04 182 51114 
Page 2 
DISCUSSION: The preference visa petition was denied by the Director, Nebraska Service Center, and is 
now before the Administrative Appeals Off~ce on appeal. The appeal will be sustained. 
The petitioner is a restaurant. It seeks to employ the beneficiary permanently in the United States as an Indian 
cook. 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. 
Section 203(b)(3)(A)(i) of the Immigration and Nationality Act (the Act), 8 U.S.C. 5 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. 3 204.5(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 regulation at 8 CFR § 204.5(1)(3)(ii) states, in pertinent part: 
(A) General. Any requirements of training or experience for skilled workers, professionals, or 
other workers must be supported by letters from trainers or employers giving the name, address, 
and title of the trainer or employer, and a description of the training received or the experience of 
the alien. 
(B) Skilled workers. If the petition is for a skilled worker, the petition must be accompanied by 
evidence that the alien meets the educational, training or experience, and any other requirements 
of the individual labor certification, meets the requirements for Schedule A designation, or meets 
the requirements for the Labor Market Information Pilot Program occupation designation. The 
minimum requirements for this classification are at least two years of training or experience. 
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. Comm. 1977). 
Here, the Form ETA 750 was accepted on April 26, 2001. The proffered wage as stated on the Form ETA 
750 is $30,000.00 per year. The Form ETA 750 states that the position requires three years experience. 
LIN 04 182 51114 
Page 3 
On appeal, counsel submits a legal brief and additional evidence. 
With the petition, 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 Form tax return for 2002; and, copies of documentation concerning the beneficiary's 
qualifications as well as other documentation. 
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. 3 204.5(g)(2), the director requested on June 30, 2004, additional pertinent evidence of the petitioner's 
ability to pay the proffered wage beginning on the priority date. The director indicated audited profitJloss 
statements; bank account records andlor personnel records would be additional evidence of the ability to pay the 
proffered wage. 
In response to the request for evidence of the petitioner's ability to pay the proffered wage beginning on the 
priority date, counsel submitted an explanatory letter and a copy of the following documents: the petitioner's 
U.S. Internal Revenue Service (IRS) Form 1120 tax return for year 2003, compiled financial statements; and, a 
personal asset disclosure. 
The director denied the petition on October 22, 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 director failed to "consider and evaluate the intangible elements" for years 
2001 and 2002. Counsel states that a loan to its shareholder; inventory and cash assets are all evidence of the 
ability to pay the proffered wage. Also, counsel states that the beneficiary would replace the 
shareholderlowner at the restaurant business who draws wages in the amount of $26,036.00 in 2001 (and in 
2002, $19,424.00) from the business. Counsel states that the owner is able to contribute his own funds to pay 
the proffered wage. Counsel states that the increase in profitability is evidence of the ability to pay. 
Counsel has submitted the following documents to accompany the appeal statement: the petitioner's U.S. 
Internal Revenue Service (IRS) Form 1120 tax returns for years 2001, 2002, 2003, a bank statement; a W-2 
statement; and, a compiled financial statement for the period ended June 30,2004. 
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. No evidence was submitted to show that the petitioner 
employed the beneficiary. 
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 
LIN04 182 51114 
Page 4 
F.2d 571 (7th Cir. 1983). In K.C.P. Food Co., Inc. v. Suva, 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 53 7. See also EIatos Restaurant Corp. v. Suva, Supra at 1 054. 
The tax returns demonstrated the following financial information concerning the petitioner's ability to pay the 
proffered wage of $30,000.00 per year from the priority date of April 26,200 1 : 
In 200 1, the Form 1 120 stated a taxable income loss of <$2 1,40 1.00>.' 
In 2002, the Form 1 120 stated taxable income of $20,68 1.00. 
In 2003, the Form 1 120 stated taxable income of $38,972.00. 
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 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 2001 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 ~iabilities.~ A 
corporation's year-end current 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 1120 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 1120 U.S. Income Tax Returns submitted by the petitioner, Schedule L found in each of 
those returns indicates the following: 
In 2001, petitioner's Form 1120 return stated current assets of $7,091.00 and 
$4,598.00 in current liabilities. Therefore, the petitioner had $2,493.00 in net 
current assets. Since the proffered wage is $30,000.00 per year, this sum is less 
than the proffered wage. 
In 2002, petitioner's Form 1120 return stated current assets of $28,086.00 and 
$4,246.00 in current liabilities. Therefore, the petitioner had $23,840.00 in net 
current assets. Since the proffered wage is $30,000.00 per year, this sum is less 
than the proffered wage. 
' 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. 
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 1 18. 
LIN 04 182 51 114 
Page 5 
In 2003, petitioner's Form 1120 return stated current assets of $9,563.00 and 
$4,823.00 in current liabilities. Therefore, the petitioner had $4,740.00 in net 
current assets. Since the proffered wage is $30,000.00 per year, this sum is less 
than the proffered wage. 
Therefore, for the period 2001 through 2003 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. 
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,3 copies of annual reports, 
federal tax returns, or audited financial statements are the means by which petitioner's ability to pay is 
determined. 
Counsel states that a loan to its shareholder evidence the ability to pay the proffered wage in combination 
with other assets is evidence of the ability to pay. It is unclear why counsel believes either a loan to a 
shareholder or the "pay down" of such loans could be evidence of the ability to pay, but, it is clear that 
shareholder proceeds, or liabilities for that matter, cannot be evidence of the ability to pay by their very 
nature. Because a corporation is a separate and distinct legal entity from its owners and shareholders, the 
assets of its shareholders or of other enterprises or corporations cannot be considered in determining the 
petitioning corporation's ability to pay the proffered wage. See Matter of Aphrodite Investments, Ltd., 17 
I&N Dec. 530 (Comm. 1980). 
Counsel states that the business' inventory and cash assets evidence the ability to pay the proffered wage in 
combination with other assets is evidence of the ability to pay. As already stated, "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. As already discussed above net current assets after including liabilities were less than the 
proffered wage. Further it is duplicative of the petitioner's finances to combine net current assets with the 
taxable income and loss as stated above. 
Counsel also states that the petitioner is willing to pay the beneficiary from his own personal funds. Again, 
there is no evidence that the petitioner has paid the beneficiary the proffered wage from his own personal 
funds. Further, as counsel acknowledges, contrary to counsel's primary assertion, CIS may not "pierce the 
corporate veil" and look to the assets of the corporation's owner including compensation paid to him by the 
corporation to satisfy the corporation's ability to pay the proffered wage. It is an elementary rule that a 
corporation is a separate and distinct legal entity from its owners and shareholders. See Matter of M, 8 I&N 
Dec. 24 (BIA 1958). 
Counsel advocates the use of the cash balance of the business account to show the ability to pay the proffered 
wage. 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. 8 204.5(g)(2), required to illustrate 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. Third, 
no evidence was submitted to demonstrate that the funds reported on the petitioner's bank statements somehow 
8 C.F.R. 8 204.5(8)(2). 
LIN 04 182 51114 
Page 6 
reflect additional available funds 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. 
In the totality of all the evidence submitted in this case, there is evidence to demonstrate that the petitioner's 
business was in an unprofitable period for one year in 2001. For the years 2001 through 2002, the taxable 
income for the petitioner increased from a loss of <$21,401.00> in 2001 to a profit of $38,972.00 in 2003. 
Counsel states that the increase in profitability of the petitioner's business is evidence of the ability to pay. 
Counsel has forthrightly submitted requested evidence allowing CIS and the AAO to examine the petitioner's 
profitability. The gross receipts for the business were $244,205.00 in 2001, $256,700.00 in 2002, and 
$262,906.00 in 2003. 
Matter of Sonegawa, 12 I&N Dec. 612 (BIA 1967), relates to petitions filed during uncharacteristically 
unprofitable or difficult years but only in a framework of profitable or successful years. The petitioning entity 
in Sonegawa had been in business for over 11 years and routinely earned a gross annual income of about 
$100,000. During the year in which the petition was filed in that case, the petitioner changed business 
locations and paid rent on both the old and new locations for five months. There were large moving costs and 
also a period of time when the petitioner was unable to do regular business. The Regional Commissioner 
determined that the petitioner's prospects for a resumption of successful business operations were well 
established. The petitioner was a fashion designer whose work had been featured in Time and Look 
magazines. Her clients included Miss Universe, movie actresses, and society matrons. The petitioner's 
clients had been included in the lists of the best-dressed California women. The petitioner lectured on fashion 
design at design and fashion shows throughout the United States and at colleges and universities in California. 
The Regional Commissioner's determination in Sonegawa was based in part on the petitioner's sound 
business reputation and outstanding reputation as a couturiere. 
Unusual and unique circumstances have been shown to exist in this case to parallel those in Sonegawa, to 
establish that year 2001 was an uncharacteristically unprofitable period for the petitioner. Counsel states that 
the beneficiary would replace the shareholderlowner at the restaurant business who draws wages as an Indian 
cook in the amount of $26,036.00 in 2001 (and $19,424.00 in 2002) from the business. In 2003, the Form 
I 120 stated taxable income of $38,972.00. Therefore, for the years 2002 and 2003, the petitioner has provided 
evidence of the ability to pay the proffered wage of $30,000.00 per year. By the evidence presented, the 
petitioner has proven its ability to pay the proffered wage. 
The evidence submitted does establish that the petitioner had the continuing ability to pay the proffered wage 
beginning on the priority date. 
The petitioner has 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. 
5 1361. The petitioner has met that burden. 
ORDER: The appeal is sustained.