Degree or an Alien of Exceptional Ability Pursuant to Section 203(b )(2) of the Immigration and Nationality Act, 8 U.S.C. § 1153(b)(2)
ON BEHALF OF PETITIONER:
INSTRUCTIONS:
Enclosed please find the decision of the Administrative Appeals Office (AAO) in your case. This is a non-precedent decision. The AAO does not announce new constructions of law nor establish agency policy through non-precedent decisions. If you believe the AAO incorrectly applied current law or policy to your case or if you seek to present new facts for consideration, you may file a motion to reconsider or a motion to reopen, respectively. Any motion must be filed on a Notice of Appeal or Motion (Form I-290B) within 33 days of the date of this decision. Please review the Form I-290B instructions at http://www.uscis.gov/forms for the latest information on fee, filing location, and other requirements. See also 8 C.F.R. § 103.5. Do not file a motion directly with the AAO.
Thank you,
Ron Rosenberg
Chief, Administrative
Appeals Office www.uscis.gov
DISCUSSION: The Director, Nebraska Service Center, denied the immigrant visa petition and the matter is now before the Administrative Appeals Office (AAO) on appeal. The appeal will be dismissed.
The petitioner describes itself as an engineering firm. It seeks to permanently employ the beneficiary in the United States as a sales engineer. The petitioner requests classification of the beneficiary as an advanced degree professional pursuant to section 203(b )(2) of the hnmigration and Nationality Act (the Act), 8 U.S.C. § 1153(b)(2). As required by statute, the petition is accompanied by an ETA Form 9089, Application for Permanent Employment Certification, approved by the United States 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 22, 2013 denial, the primary issue in this case is whether the petitioner has the ability to pay the proffered wage as of the priority date and continuing until the beneficiary obtains lawful permanent residence.
In pertinent part, section 203(b)(2) of the hnmigration and Nationality Act (the Act), 8 U.S.C. § 1153(b )(2), provides immigrant classification to members of the professions holding advanced degrees or their equivalent and whose services are sought by an employer in the United States. An advanced degree is a United States academic or professional degree or a foreign equivalent degree above the baccalaureate level. 8 C.F.R. § 204.5(k)(2). The regulation further states: "A United States baccalaureate degree or a foreign equivalent degree followed by at least five years of progressive experience in the specialty shall be considered the equivalent of a master's degree. If a doctoral degree is customarily required by the specialty, the alien must have a United States doctorate or a foreign equivalent degree." I d.
Section 203(b )(2) of the Act also includes aliens "who because of their exceptional ability in the sciences, arts or business, will substantially benefit prospectively the national economy, cultural or educational interests, or welfare of the United States." The regulation at 8 C.F.R. § 204.5(k)(2) defines "exceptional ability" as "a degree of expertise significantly above that ordinarily encountered."
The regulation at 8 C.F.R. § 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 p. 3 pnonty date is established and continuing until the beneficiary obtains lawful permanent residence. Evidence of this ability shall be either 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 DOL. See 8 C.F.R. § 204.5( d).
Here, the ETA Form 9089 was accepted on July 24, 2012. The proffered wage as stated on the ETA Form 9089 is $95,513.60 per year. The ETA Form 9089 states that the position requires a master's degree in chemical engineering and 36 months of experience in the job offered or a bachelor's degree and five years of progressive experience as a sales engineer or 60 months experience in an alternate occupation, technical sales and marketing.
The AAO conducts appellate review on a de novo basis. See Soltane v. DOl, 381 F.3d 143, 145 (3d Cir. 2004). The AAO considers all pertinent evidence in the record, including new evidence properly submitted upon appeal.1
The evidence in the record of proceeding shows that the petitioner is structured as an S corporation. On the petition, the petitioner claimed to have been established on May 1, 1985, and that it currently employs nine workers. According to the tax returns in the record, the petitioner's fiscal year is based on a calendar year. On the ETA Form 9089, signed by the beneficiary, the beneficiary does not claim to have been employed by the petitioner.
The petitioner must establish that its job offer to the beneficiary is a realistic one. Because the filing of an ETA Form 9089 establishes a priority date for any immigrant petition later based on the ETA Form 9089, 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. § 204.5(g)(2). In evaluating whether a job offer is realistic, United States Citizenship and Immigration Services (USCIS) 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. 612 (Reg. Comm. 1967).
In detel:mining the petitioner's ability to pay the proffered wage during a given period, USCIS 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 The submission of additional evidence on appeal is allowed by the instructions to the Form I-290B, which are incorporated into the regulations at 8 C.F.R. § 103.2(a)(1). p. 4 petitioner's ability to pay the proffered wage. The record of proceeding does not contain any evidence of wages paid by the petitioner to the beneficiary.
If, as in this case, the petitioner does not establish that it employed and paid the beneficiary an amount at least equal to the proffered wage during that period, USCIS will next examine the net income figure reflected on the petitioner's federal income tax return, without consideration of depreciation or other expenses. River Street Donuts, LLC v. Napolitano, 558 F.3d 111 (1st Cir. 2009); Taco Especial v. Napolitano, 696 F. Supp. 2d 873 (E.D. Mich. 2010), aff'd, No. 10-1517 (6th Cir. filed Nov. 10, 2011). 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), aff'd, 703 F.2d 571 (7th Cir. 1983). Reliance on the petitioner's gross receipts and wage expense is misplaced. Showing that the petitioner's gross receipts 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 USCIS, 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. The court specifically rejected the argument that USCIS should have considered income before expenses were paid rather than net income. See Taco Especial v. Napolitano, 696 F. Supp. 2d at 881 (gross profits overstate an employer's ability to pay because it ignores other necessary expenses). With respect to depreciation, the court in River Street Donuts noted:
The AAO recognized that a depreciation deduction is a systematic allocation of the cost of a tangible long-term asset and does not represent a specific cash expenditure during the year claimed. Furthermore, the AAO indicated that the allocation of the depreciation of a long-term asset could be spread out over the years or concentrated into a few depending on the petitioner's choice of accounting and depreciation methods. Nonetheless, the AAO explained that depreciation represents an actual cost of doing business, which could represent either the diminution in value of buildings and equipment or the accumulation of funds necessary to replace perishable equipment and buildings. Accordingly, the AAO stressed that even though amounts deducted for depreciation do not represent current use of cash, neither does it represent amounts available to pay wages.
We find that the AAO has a rational explanation for its policy of not adding depreciation back to net income. Namely, that the amount spent on a long term tangible asset is a "real" expense.
River Street Donuts at 118. "[USCIS] 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." Chi-Feng Chang at 537 (emphasis added).
The petitioner submitted copies of its 2007 through 2012 tax returns. The priority date is July 24, 2012. The proffered wage is $95,513.60. The petitioner's 1120S2 tax returns demonstrate its net income as shown in the table below3:
- In 2007, the Form 1120S stated net income of -$347.00.
- In 2008, the Form 1120S stated net income of -$27,444.00.
- In 2009, the Form 1120S stated net income of -$139,667.00.
- In 2010, the Form 1120S stated net income of $29,503.00.
- In 2011, the Form 1120S stated net income of $91,810.00.
- In 2012, the Form 1120S stated net income of -$24,161.00.
Therefore, for the year 2012, the petitioner did not have sufficient net income to pay the proffered wage.
As an alternate means of determining the petitioner's ability to pay the proffered wage, USCIS may review the petitioner's net current assets. Net current assets are the difference between the petitioner's current assets and current liabilities.4 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 the total of a corporation's end-of-year net current assets and the wages paid to the beneficiary (if any) are equal to or greater than the proffered wage, the petitioner is expected to be able to pay the 2 Where an S corporation's income is exclusively from a trade or business, USCIS considers net income to be the figure for ordinary income, shown on line 21 of page one ofthe petitioner's IRS Form 1120S. However, where an S corporation has income, credits, deductions or other adjustments from sources other than a trade or business, they are reported on Schedule K. If the Schedule K has relevant entries for additional income, credits, deductions or other adjustments, net income is found on line 18 of Schedule K. See Instructions for Form 1120S, at http://www.irs.gov/pub/irs-pdf/i1120s.pdf (indicating that Schedule K is a summary schedule of all shareholders' shares of the corporation's income, deductions, credits, etc.). The petitioner's net income is found on Schedule K of its tax returns.
proffered wage using those net current assets. The petitioner's tax returns demonstrate its net current assets as shown in the table below:
- In 2007, the Form 1120S stated net current assets of -$53,939.00.
- In 2008, the Form 1120S stated net current assets of -$38,566.00.
- In 2009, the Form 1120S stated net current assets of -$112,815.00.
- In 2010, the Form 1120S stated net current assets of -$129,682.00.
- In 2011, the Form 1120S stated net current assets of -$139,020.00.
- In 2012, the Form 1120S stated net current assets of -$146,772.00.
Therefore, for the year 2012, the petitioner failed to establish its ability to pay the proffered wage from its net current assets.
Accordingly, from the date the labor certification was accepted for processing by the DOL, the petitioner had not established that it had the continuing ability to pay the beneficiary the proffered wage as of the priority date through an examination of wages paid to the beneficiary, or its net income or net current assets.
On appeal, counsel asserts that the petitioner's financial records submitted as evidence demonstrate that it has the ability to pay the proffered wage. Counsel further asserts that the director failed to consider the totality of the circumstances in order to obtain an accurate account of the petitioner's financial ability to pay the proffered wage.
The petitioner submitted a copy of its profit and loss statements for 2007 through 2012. The petitioner's reliance on unaudited financial records is misplaced. The regulation at 8 C.F.R. § 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.Claims not backed by documents
The petitioner submitted a copy of its bank statements for 2012. However, 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. § 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. § 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 reflect additional available funds that were not reflected on its tax return(s).
Counsel's assertions and the evidence presented on appeal do not outweigh the evidence of record that demonstrates that the petitioner could not pay the proffered wage from the day the ETA Form 9089 was accepted for processing by the DOL. users may consider the overall magnitude of the petitioner's business activities in its determination of the petitioner's ability to pay the proffered wage. See Matter of Sonegawa, 12 r&N Dec. 612. 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. As in Sonegawa, USCIS may, at its discretion, consider evidence relevant to the petitioner's financial ability that falls outside of a petitioner's net income and net current assets. users may consider such factors as the number of years the petitioner has been doing business, the established historical growth of the petitioner's business, the overall number of employees, the occurrence of any uncharacteristic business expenditures or losses, the petitioner's reputation within its industry, whether the beneficiary is replacing a former employee or an outsourced service, or any other evidence that users deems relevant to the petitioner's ability to pay the proffered wage.
In this matter, the totality of the circumstances does not establish that the petitioner had or has the ability to pay the proffered wage as of the priority date. There are no facts paralleling those found in Sonegawa that are present in the instant matter to a degree sufficient to establish that the petitioner had the ability to pay the proffered wage. Counsel asserts that the petitioner has been in business since May 1985, has experienced past growth, and has a reasonable expectation of future growth. Counsel further asserts that the petitioner has a reasonable expectation of continued growth based upon its financial history even during an economic downturn. The petitioner submitted a statement signed by its president and dated May 3, 2013 explaining its company background and historical performances, its 2012 performance, and its business outlook for 2013. The petitioner also lists its business clients and executed on-call agreements. The petitioner submitted as evidence a copy of contractual agreements for the petitioner's services dated August 31, 2010, August 9, 2011, February 6, 2012, February 29, 2012, June 1, 2012, August 8, 2012, and August 27, 2012. The petitioner submitted a copy of its tax returns as noted above. A petitioner must establish the elements for the approval of the petition at the time of filing. A petition may not be approved if the beneficiary was not qualified at the priority date, but expects to become eligible at a subsequent time. Matter of Katigbak, 14 r&N Dec. 45, 49 (Comm'r 1971). Showing that the petitioner 's gross receipts are expected to exceed the proffered wage is insufficient. Similarly, the reliance on the petitioner's p. 8 future receipts and wage expense is misplaced. Showing that the petitioner's gross receipts are expected to exceed the proffered wage is insufficient. Furthermore, the petitioner has not shown through independent, objective financial documents that the anticipated increase in income will be significant enough to allow it to pay the beneficiary's wage. The petitioner cannot rely upon uncertain future cash flows to establish its current ability to pay the proffered wage. Against the projection of future earnings, Matter of Great Wall, 16 I&N Dec. 142, 144-145 (Acting Reg. Comm. 1977) states:
I do not feel, nor do I believe the Congress intended, that the petitioner, who admittedly could not pay the offered wage at the time the petition was filed, should subsequently become eligible to have the petition approved under a new set of facts hinged upon probability and projections, even beyond the information presented on appeal.
The record reflects that except for 2010 and 2011 the petitioner has had a net loss and net current liabilities for every year from 2007 to 2012. The petitioner's overall financial losses from 2007 to 2012 do not indicate its continuing ability to pay the proffered wage as of the priority date. Counsel asserts on appeal that the petitioner has been directly affected by the economic recession which has affected its industry in the United States, that the recession has temporarily worsened the petitioner's financial situation, and that this has disrupted the petitioner's regular course of business. A broad statement by counsel that the petitioner's business was impacted adversely by the economic recession does not by itself demonstrate the petitioner's continuing ability to pay the proffered wage beginning on the priority date. Rather, such a general statement merely suggests, without supporting evidence, that the petitioner's financial status might have appeared stronger had it not been for the economic recession/slow-down. The petitioner has not demonstrated the occurrence of any uncharacteristic business expenditures or losses in 2012 that would have directly affected its ability to pay the proffered wage. In fact, the record of proceeding shows that the petitioner entered into a number of business agreements for 2012, but that the net income and net current asset figures for that year are both less than the proffered wage. Going on record without supporting documentary evidence is not sufficient for purposes of meeting the burden of proof in these proceedings. Matter of Soffici, 22 I&N Dec. 158, 165 (Cornm. 1998) (citing Matter of Treasure Craft of California, 14 I&N Dec. 190 (Reg. Comm. 1972)). Without independent objective documentary evidence to support the claim, the assertions of counsel will not satisfy the petitioner's burden of proof. Matter of Obaigbena, 19 I&N Dec. 533 (BIA 1988); Matter of Ramirez-Sanchez, 17 I&N Dec. 503, 506 (BIA 1980). If USCrS fails to believe that a fact stated in the petition is true, USCrS may reject that fact. Section 204(b) of the Immigration and Nationality Act, 8 U.S.C. § 1154(b); see alsoAnetekhai v. l.N.S., 876 F.2d 1218, 1220 (5th Cir.1989); Lu-Ann Bakery Shop, Inc. v. Nelson, 705 F. Supp. 7, 10 (D.D.C.1988); Systronics Corp. v. INS, 153 F. Supp. 2d 7, 15 (D.D.C. 2001). Regardless, the petitioner has failed to establish its ability to pay the wage in 2012.
Accordingly, the evidence submitted does not establish that the petitioner had the continuing ability to pay the proffered wage beginning on the priority date.
In visa petition proceedings, it is the petitioner's burden to establish eligibility for the immigration benefit sought. Section 291 of the Act, 8 U.S.C. § 1361; Matter of Otiende, 26 I&N Dec. 127, 128 (BIA 2013). Here, that burden has not been met.
ORDER: The appeal is dismissed.