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 in your case. All of the documents related to this matter have been returned to the office that originally decided your case. please be advised that any further inquiry that you might have concerning your case IDI,ISt be made to that office. If you believe the AAO inappropriately applied the law in reaching its decision, or you have· additional information that you wish to have considered, you may file a 111otion to reconsider or a motion to reopen in accordance with the instructions on Form I-290B, Notice of Appeal or Motion, with a fee of $630. The specific requirements for filing such a motion can be found at 8 C.F.R. § 103.5. Do not file any motion directly with the AAO. Please be aware that 8 C.F.R. § 103.5(a)(l)(i) requires any motion to be filed within 30 days of the decision that the motion seeks to reconsider or reopen.
(tffi'
Ron Rosenberg
Acting Chief, Administrative Appeals Office w.w.w;uscis.gov
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 dismissed. The petitioner is an educational center. It seeks to employ the beneficiary permanently in the United States as a special education teacher pursuant to sec.tion 203(b )(2) of the Immigration and Nationality Act (the Act), 8 U .S.C. § 1153(b )(2). In pertinent part, section 203(b )(2) of the Act 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. As required by statute, the petition is accompanied by 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 elabor~tion of the procedural history will be made only as necessary. As set forth in the director's April 27, 2012 denial, the single 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.
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 priority 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). 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 DOL and submitted with the instant petition. Matter of Wing's Tea House, 16 I&N Dec. 158 (Act. Reg. Comm. 1977).
Here, the ETA Form 9089 was accepted on January 29, 2009. The proffered wage as stated on the ETA Form 9089 is $48,000 per year. The ETA Form 9089 states that the position requires a Master's degree and six months of work experience.
The AAO conducts appellate review on a de novo basis. See Soltane v. DOJ, 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 in 1994 and to currently employ two 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 on January 27, 2009, the beneficiary did not claim to have worked for the petitioner. However, United States Citizenship and Immigration Services (USCIS) records and the record at hand provide that the beneficiary has been employed by the petitioner since 2005.
The petitioner must establish that its job offer to the beneficiary is a realistic one. Because the filing of an ETA Form 9089 labor certification application 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, 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 determining 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 petitioner's ability to pay the proffered wage. In the instant case, the petitioner demonstrated that it . paid the beneficiary $35,030 and $41,090 in 2009 and 2010, which is less than the proffered wage. Thus, the petitioner must demonstrate that it can pay the difference between wages actually paid to the beneficiary and the proffered wage in.
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, 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 (1 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. 1 The submission of additional evidence on appeal is allowed by the instructions to the Form I-290B, which are incorporated into the regulation at 8 C.P.R. § 103.2(a)(1). 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).
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 sales and profits and wage expense is misplaced. Showing that the petitioner's gross sales and profits 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 CO\}rt specifically rejected the argument that USCIS should have considered ili'come 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 record before the director closed on March 15, 2012 with the receipt by the director of the petitioner's submissions in response to the director's request for evidence. As of that date, the petitioner's 2011 federal income tax return was not yet due. Therefore, the petitioner's income tax return for 2010 is the most recent return available. The petitioner's tax returns demonstrate its net income for 2009 and 2010, as shown in the table below.
(b)(6)PageS
Tax Year . Proffered Wage Wage Paid to Net Income* Total1 Beneficiary
2009 $47,730 $35,030 $5,714 -$7,256
2010 $47,730 $41,090 $2,953 -$3,957
Net Income* Ordinary income (loss) from trade or business activities (Line 21-IRS Form 1120S); OR Sch. K income (Ioss):2006-2010, Sch. K is used if these lines differ from page 1, Line 21. Total1 is the difference between proffered wage and net income Therefore, for the years 2009 and 2010, 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. We reject, however, any suggestion that the petitioner's total assets should have been considered in the determination of the. ability to pay the proffered wage. The petitioner's total assets include depreciable assets that the petitioner uses in its business, including real property. 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 proffered wage. The amounts listed on page 1 of the Form 1120S, Block F, are total assets, not net current assets. Rather, USCIS 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 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 proffered wage using those net current assets. The petitioner's tax returns demonstrate it was not required to complete a Schedule L.
Therefore, from the date the ErA Form 9089 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. Counsel asserts on appeal that the director failed to give appropriate consideration to a personal guaranty by the petitioner's shareholders, as well as the petitioner's totality of the circumstances. 2 According to Barron's Dictionary of Accounting Terms 117 (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). /d. at 118.
Counsel's assertions on appeal cannot be concluded to outweigh the evidence presented in the tax returns as submitted by the petitioner 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.
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'r 1980). ·The court in Sitar v. Ashcroft, 2003 WL 22203713 (D.Mass. Sept. 18, 2003) stated, "nothing in the governing regulation, 8 C.F.R. § 204.5, permits [USCIS] to consider the financial resources of individuals or entities who have 'no legal obligation to pay the wage."
Counsel's reliance on the balances in the petitioner shareholder's bank accounts 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 shareholder's bank statements somehow reflect additional available funds that were not reflected on its tax return(s), such as the petitioner's taxable income (income minus deductions).
The decision in Full Gospel Portland Church v. Thornburgh, 730 F. Supp. 441 (D.D.C. 1988), is not binding here. Although the AAO may consider the reasoning of the decision, the AAO is not bound to follow the published decision of a United States district court in cases arising within the same district. See Matter of K-S-, 20 I&N Dec. 715 (BIA 1993). Further, the decision in Full Gospel is distinguishable from the instant case. The court in Full Gospel ruled that USCIS should consider the pledges of parishioners in determining a church's ability to pay. the wages of a beneficiary. Here, counsel's assertion is that USCIS should treat its shareholder's personal assets as evidence of its ability to pay, whereas a parishioner's pledge is a promise to give money to a church.
Counsel states· that a DOL Board of Alien Labor Certification Appeals (BALCA) case is applicable to the instant petition before the Department of Homeland Security's AAO. Citing to Ohsawa America, 1988-INA-240 (BALCA 1988), counsel states that this case stands for the proposition that the $4 million personal assets of the corporate owner were sufficient and should have been considered in determining the ability to pay the proffered wage in that case. Counsel does not state how DOL precedent is binding in these proceedings. While 8 C.F.R. § 103.3(c) provides that precedent decisions of USCIS are binding on all its employees in the administration of the Act, BALCA decisions are not similarly binding. Precedent decisions must be designated and published in bound volumes or as interim decisions. 8 C.F.R. § 103.9(a).
Moreover, counsel also does not state that the BALCA panel in Ohsawa America also considered the fact that the petitioning entity showed increased rev:~ime and decreased operating-losses in addition to p. 7 one of its shareholder's willingness to fimd the company. Thus, in addition to not being binding precedent, Ohsawa America is distinguishable from the facts of the instant petition.
Counsel also cites to Ranchito Coletero, 2002-INA-104 (2004 BALCA) Ranchito Coletero deals with a sole proprietorship and is not directly applicable to the instant petition, which deals with a corporation. · The guaranty of a shareholder cannot be considered in determining the petitioning corporation's ability to pay the proffered wage, Under the terms of the guaranty, the guarantors guaranteed the wage of the beneficiary. Even assuming the guarantors had guaranteed payment of the beneficiary's wages, the guaranty lacks independent objective evidence that the amount of salary to be guaranteed, and the period of the purported guaranty of the beneficiary's wages, could have been realistically satisfied. Further, the guaranty is dated February 28, 2012, more than 3 years after the priority . date. Even if enforceable as a guaranty of the future wages of the beneficiary, the letter from the shareholders could not help establish the ability of the petitioner to pay the proffered wage prior to February 28, 2012. With the 1-140 petition, evidence is required of a sponsoring employer's ability to pay the proffered wage as of the priority date, not a guaranty to support the beneficiary in the future. 8 C.F.R. § 204.5(g)(2). A petitioner must establish eligibility at the time of filing; a petition cannot be approved at a future date after the petitioner becomes eligible under a new set of facts. See Matter ofKatigbak, 14 I&N Dec. 45,49 (Conim'r 1971).3 On appeal, counsel discusses previously submitted financial statements from the petitioner's accountant. 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. An audit is conducted. in accordance with generally accepted auditing standards to obtain a reasonable assuranee that the financial statements of the business are free of material misstatements. The unaudited financial statements that counsel submitted with the petition are not persuasive evidence. The accountant's report that accompanied those financial statements makes clear that they were produced pursuant to a compilation rather than an audit. As the accountant's report also makes clear, financial statements produced pursuant to a compilation are the representations of management compiled into standard form. 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
USCIS may consider the overall magnitude ofthe petitioner's business activities in its determination ofthe petitioner's ability to pay the proffered wage. See Matter of Sonegawa, 12 I&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 3 Further, a shadow of doubt is cast upon the guaranty claim because, USCIS records and the record at hand, indicate that the beneficiary has been employed by the petitioner as a temporary nonimmigrant specialty worker (H-1B) and was paid less than the prevailing wage which the petitioner agreed to pay under penalty of perjury. Specifically, in 2008, the petitioner declared under penalty of perjury that the beneficiary would be paid at least the prevailing wage of $42,683. However, the supplied Forms W-2 indicated that the beneficiary was paid less than the prevailing · wage in 2009 and 2010. p. 8 petitioner ch,anged 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 Regtonal 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 mafrons. 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. USCIS may consider such factors as the number of years the petitioner has been doing business, the established historical growth of the petitioner's business, t!te overall number of employees, the occurrence of any uncharacteristic busine~s 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 USCIS deems relevant to the petitioner's ability to pay the proffered wage.
In the instant case, the record reflects that the petitioner is in a decline, the petitioner claims to employ two employees, the worksite is the shareholder's personal home, the beneficiary appears to be the only employee, and no evidence of a reputation within the education industry was submitted. The petitioner only had $90,410 in total revenue in 2010. Thus, assessing the totality of the circumstances in this individual case, it is concluded that the petitioner has not established that it had the continuing ability to pay the proffered wage.
The evidence submitted does not establish 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. § 1361. The petitioner has not met that burden.
ORDER: The appeal is dismissed.