sustained EB-3 Case: Supermarket

identiQing data deleted to 
prevent clearly unwarranted 
invasion of personal privac) 
U.S. Department of IIomeland Security 
20 Mass. Ave., N. W., Rrn. 3000 
Washington, DC 20529 
U.S. Citizenship 
and Immigration 
Services 
PUBLIC COPY 
_PI 
SRC 06 800 05909 
PETITION: 
 Immigrant Petition for Alien Worker as a Skilled Worker or Professional Pursuant to 
Section 203(b) of the Immigration and Nationality Act, 8 U.S.C. tj 1 153(b) 
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 
Page 2 
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 petitioner is a supermarket. It seeks to employ the beneficiary permanently in the United States as an 
executive secretary. As required by statute, a Form ETA 9089, Application for Permanent 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. 
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 ths decision. Further 
elaboration of the procedural history will be made only as necessary. 
As set forth in the director's original March 8, 2006, the single issue in ths 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. 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 or seasonal nature, for which qualified workers are not available in 
the United States. 
The regulation at 8 C.F.R. 5 204.5(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. 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, which is the date the Form ETA 9089 was accepted for processing by any office within the employment 
system of the Department of Labor. See 8 CFR 5 204.5(d). The priority date in the instant petition is 
December 2,2005. The proffered wage as stated on the Form ETA 9089 is $36,504 annually. 
The AAO takes a de novo look at issues raised in the denial of ths petition. See Dor v. INS, 89 1 F.2d 997, 1002 
n. 9 (2d Cir. 1989)(noting that the AAO reviews appeals on a de novo basis). The AAO considers all perhnent 
Page 3 
evidence in the record, including new evidence properly submitted upon appeal1. Relevant evidence submitted on 
appeal includes counsel's brief, a copy of the petitioner's 2004 Form 1120X, Amended U.S. Corporation Income 
Tax Return, a copy of the corrected 2004 Form 1120, U.S. Corporation Income Tax Return, and a copy of the 
petitioner's 2005 Form 1120. Other relevant evidence includes a copy of the petitioner's orignal 2004 Form 
1120 and a copy of the petitioner's unaudited 2004 profit and loss ~tatement.~ The record does not contain any 
other evidence relevant to the petitioner's ability to pay the proffered wage. 
The petitioner's orignal 2004 Form 1120 reflects a taxable income before net operating loss deduction and 
special deductions or net income of $53,007, and the original 2004 Form 1120 also reflects net current assets of 
$906. 
The petitioner's 2004 Form 1120X reflects a change in total income from $346,617 to $398,736, and the 
petitioner's corrected Form 1120 reflects a taxable income before net operating loss deduction and special 
deductions or net income of $99,539 with net current assets of $47,438. 
The petitioner's 2005 Form 1120 reflects a taxable income before net operating loss deduction and special 
deductions or net income of $44,05 1 and net current assets of $47,797. 
On appeal, counsel claims that the petitioner has established its ability to pay the proffered wage of $36,504 
based on the inclusion of its net operating loss (NOL) in prior years, total assets, and growth from 2004 to 
2005. Counsel states: 
Please observe that there is no taxable income on line 30 [2004], because this company had a 
carried loss from prior years, but if you look on line 28 you will find that this company was 
profitable during this fiscal year and the profit was for US$99,539.00 (ninety nine thousand 
five hundred and thirty nine dollars). Also, you will find that the inventory was not properly 
recorded on original return, and as result of this [sic] changes the new total assets recorded on 
Schedule L is in the amount of US$113,815 (one hundred and thirteen thousand and eight 
hundred and sixteen dollars), also an adjustment to the current accounts payables as of 
December 2004 was done in the amount of US$35,780 (thirty five thousand seven hundred 
and eight dollars) also as of December 2004, [the petitioner] has currently [sic] liabilities to 
it's [sic] shareholders in the amount of US$135,998 (one hundred thirty five thousand nine 
hundred and ninety eight dollars). This amendment has been filed with the Department of 
Treasury and all necessary changes have been made (Please see the copy of the Post Office 
envelope attached - Doc. 1) 
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. 5 103.2(a)(l). 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 1988). 
2 
 Counsel's reliance on unaudited financial records is misplaced. The regulation at 8 C.F.R. 5 204.5(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. 
Page 4 
In reference to Income Tax Return for 2005, you will observe a considerable growth in the 
business sales. This business has increased in sales from US$946,496 (nine hundred forty six 
thousand and four hundred and ninety six dollars) to US$1,378,152 (one million three 
hundred seventy eight thousand and one hundred and fifty two dollars). Also on Schedule L, 
the total assets properly recorded, including inventory is in the amount of US$158,535 (one 
hundred and fifty eight thousand five hundred and thirty five dollars). 
In regards to the taxable income on line 30, this entity is still benefiting from carryover losses 
from prior years, but has recorded a profit in the amount of US$49,812 (forty nine thousand 
eight hundred and twelve dollars). The current accounts payable as of December of 2005 is 
US$74,830 (seventy four thousand eight hundred thirty dollars) also as of December of 2005 
the petitioner has current liabilities to it's [sic] shareholders in the amount of US$98,852 
(ninety eight thousand eight hundred and fifty two dollars), which shows a start on return of 
initial investments. (Please see 2004 and 2005 income tax return - Doc. 2) 
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. fj 204.5(g)(2). In 
evaluating whether a job offer is realistic, CIS requires the petitroner 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. 
612 (Reg. Comrn. 1967). 
In determining the petitioner's ability to pay the proffered wage, CIS will first examine whether the petitioner 
employed the beneficiary at the time the priority date was established. If the petitioner establishes by 
documentary evidence that it employed the beneficiary at a salary equal to or greater than the proffered wage, 
this evidence will be considered prima facie proof of the petitioner's ability to pay the proffered wage. In the 
instant case, on the Form ETA 9089, signed by the beneficiary on December 16, 2005, the beneficiary does 
not claim the petitioner as a past or present employer. In addition, counsel has not submitted any Forms W-2, 
Wage and Tax Statements, or Forms 1099-MISC, Miscellaneous Income, issued by the petitioner for the 
beneficiary, to demonstrate that it employed the beneficiary in the pertinent year, 2005. Therefore, the 
petitioner has not established that it employed the beneficiary from the priority date of December 2,2005. 
As an alternative means of determining the petitioner's ability to pay the proffered wage, CIS will next 
examine the petitioner's net income figure as 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. 1 986) (citing Tongatapu Woodcraft Hawaii, Ltd. v. 
Feldman, 736 F.2d 1305 (9' Cir. 1984)); see also Chi-Feng Chang v. Thornburgh, 719 F. Supp. 532 (N.D. Tex. 
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 F.2d 571 (7'h Cir. 1983). In K. C.P. Food Co., Inc., the court held that 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. 623 F.Supp at 1084. The court specifically rejected the argument that 
CIS should have considered income before expenses were paid rather than net income. Finally, there is no 
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precedent that would allow the petitioner to "add back to net cash the depreciation expense charged for the year." 
See also Elatos Restaurant Corp., 632 F. Supp. at 1054. 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. 
For a "C" corporation, CIS considers net income to be the figure shown on line 28 of the petitioner's Form 1120, 
U.S. Corporation Income Tax Return. The petitioner's tax returns demonstrate that its net incomes in 2004 and 
2005 were $53,007 (original 2004 Form 1 120), $99,539 (corrected 2004 Form 1 120), and $44,05 1, respectively. 
The petitioner has established that it could have paid the proffered wage of $36,504 from its net income of 
$99,539 in 2004 and $44,05 1 in 2005.) 
Nevertheless, the petitioner's net income is not the only statistic that can be used to demonstrate a petitioner's 
ability to pay a proffered wage. If the net income the petitioner demonstrates it had available during that 
period, if any, added to the wages paid to the beneficiary during the period, if any, do not equal the amount of 
the proffered wage or more, CIS will review the petitioner's assets. The petitioner's total assets include 
depreciable assets that the petitioner uses in its business. Those depreciable assets will not be converted to 
cash during the ordinary course of business and will not, therefore, become funds available to pay the 
proffered wage. Further, the petitioner's total assets must be balanced by the petitioner's liabilities. 
Otherwise, they cannot properly be considered in the determination of the petitioner's ability to pay the 
3 
 It is noted that the director used line 30 of the Forms 1120 in determining the petitioner's ability to pay the 
proffered wage of $36,504. However, the net operating loss (NOL) deduction is an exception to the general 
income tax rule that a taxpayer's taxable income is determined on the basis of its current year's events. This 
deduction allows the taxpayer to offset one year's losses against another year's income. The NOL for a 
company can generally be used to recover past tax payments or reduce future tax payments. When carried 
back, the NOL reduces the taxable income of the relevant earlier year, resulting in a recomputation of the tax 
liability and a refund or credit of the excess amount paid. Carryovers produce a similar reduction in the 
taxable income of later years, and this reduces the tax payable when the return is filed. The primary purpose 
of the NOL deduction is to ameliorate the effect of the annual accounting period by treating businesses with 
widely fluctuating income more nearly in accord with steady-income businesses. 
If a corporation carries forward its NOL, it enters the carryover on Schedule K, Form 1120, line 12. It also 
enters the deduction for the carryover on line 29(a) of Form 1120 or line 25(a) of Form 1120-A. However, 
the carryover cannot be more than the corporation's taxable income after special deductions. See 26 C.F.R. 
$1.172-4 and 26 C.F.R. 51.172-5. See also Corporations, I.R.S. Pub. No. 542, at 15-16 (2006), 
http://www.irs.gov/pub/irs-pdflp542.pdf (accessed April 2, 2007). Because a petitioner's NOL is related to 
another year's outcome, it should be omitted from the analysis of the petitioner's "bottom line" ability to pay 
the proffered wage in a certain year. CIS disregards NOL in C corporations by using Line 28 (taxable income 
before NOL deduction and special deductions) of the IRS Form 1120 in our computation of net income. 
Page 6 
proffered wage. Rather, 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 liabilities.' 
 A 
corporation's year-end current assets are shown on Schedule L, lines 1 through 6. Its 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 out of those net 
current assets. The petitioner's net current assets in 2004 and 2005 were $47,438 (corrected 2004 Fonn 
1120), and $47,797, respectively. The petitioner could have paid the proffered wage of $36,504 from its net 
current assets in 2004 and 2005. 
On appeal, counsel contends that the petitioner has established its ability to pay the proffered wage of $36,504 
based on the inclusion of its net operating loss (NOL) in prior years, total assets, and growth from 2004 to 
2005. 
Counsel is correct for the wrong reasons. As stated above, the petitioner has shown that it had sufficient 
funds to pay the proffered wage of $36,504 for either its net income or its net current assets in 2004 and 2005. 
For the reasons discussed above, the assertions of counsel on appeal and the evidence submitted on appeal 
overcome the decision of the director. 
In visa petition proceedings, the burden of proving eligbility for the benefit sought remains entirely with the 
petitioner. Section 291 of the Act, 8 U.S.C. 5 1361. Here, that burden has been met. 
ORDER: 
 The director's decision of March 8,2006 is withdrawn. The petition is approved. 
' According to Barvon S Dictionary of Accounting Terms 11 7 (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 accounts 
payable, short-term notes payable, and accrued expenses (such as taxes and salaries). Id. at 1 18.