Advanced 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 must 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 motion to reconsider or a motion to reopen in accordance with the instructions on Foim 1-290B, 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.
Thank you,
(ill()
Ron Rosenberg
Acting Chief, Administrative Appeals Office www.uscis.gov
DISCUSSION: The preference visa petition was denied by the Director, Texas Service Center. The petition is now before the Administrative Appeals Office (AAO) on appeal. The appeal will be dismissed. ·
·The petitioner is an accounting and financial services business. It se~ks to employ the beneficiary permanently in the United States as a senior staff accountant. 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 proced~ral 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 May 1, 2012 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 Immigration 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." /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 whic~ 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 p. 3 (b)(6)Page 3 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 June 24, 2008. Th~ · proffered wage as stated on the ETA Form 9089 is $63,000.00 per year. The ETA Fonn 9089 states. that the position requires a master's degree iri accounting or a bachelor's degree and five years of progressive 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 on May 22, 1998, and that it currently employs 12 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 claims to have been employed by the petitioner since Augtist 22, 2005. .
The petitioner must establish that its job offer to the beneficiary is a realistic one. Because the filing of an ETA Fohn 9089 establishes a priority date for any immigrant petition later based on the ETA Form 9089, the petitioner must establi~h 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 Maiter of Great Wall, 16 I&N Dec. 142 (Acting Reg. Comm. 1977); see also 8 C.F.R. § 2045(g)(2). In evaluating whether a job offer is realistic, United States Citizenship and Immigration Services (USCIS) requires the petitiqner to demonstrate fmancial 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 ofSonegawa, 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 wi!l be considered prima facie proof of the petitioner's ability to pay the proffered wage. The recor.d of proceeding contains evidence of wages paid to the beneficiary as shown in the table below: · · 1_ The subrrii~sion of additional evidence on appeal is allowed by the instructions to the Form 1-. 290B, which are incorporated into the regulations at 8 C.F.R. § 103.2(a)(1). ·
- In 2008, the IRS Form W-2 stated total wages of $43,858.82 (a deficiency of $19,141.18).
- In 2009, the IRS Form W-2 stated total wages of $51,079.69 (a deficiency of $11,920.31). .
- In 2010, the IRS Form W-2 stated total wages of $52,076.79 (a deficiency of $10,923.21).
- In 2011,"the IRS Form W-2 stated total wages of $58,797.52 (a deficiency of $4,202.48).
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. ~upp. 2d 873 (E.D. Mich. 2010), aff'd, No. J0-1517 (6 b Cir. filed Nov. 10, 2011). Reliance on federal income tax returns as a basis for determiniQg 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. 01. 1982), ajf'd, 703 E2d 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 inio 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 p. 5 for depreciation do not repre'sent current use of cash, neither does it represent amounts available to pay \Vages.
We find that the AAO has a rational explanation for its policy of not adding depreciation back to net income. ·Namely, thatthe .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' arg\unent 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's 2010 federal· income tax return is the most recent return in the record. The proffered wage is $63,000.00. The petitioner's 112082 tax returns demonstrate its net income as shown in the table below:
- In 2008, the Form 1120S stated net incame of $33;187.00.
- In 2009, the Form 1120S stated net income of $18,238.00.
- In 2010, the Form 1120S stated net income of -$23,177.00.
- The petitioner did not provide its tax return for 2011.
Therefore, for the years 2010' and 2011, the petitioner did not have sufficient net income to pay the difference between the proffered wage and the wages paid to the beneficiary, / 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 asseis are the difference between the petitioner's curicmt assets and current 1iabilities.3 A corporation's year-end current assets are shown on Schedule L, lines 1 through 6. Its year-end cu'rrent 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 eqmll to or greater than the proffered wage, the petitioner is expected 2 Where an S corporation's income is exchisively ·from a trade or business, USCIS considerS net income to be the figure for ordinary income, shown on line 21 of page one of the 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 adjustinents, net income is fou~d on line 18 of Schedule K. · See Instructions for Forffi 1120S; at http://www.irs.gov/pub/irs-pdf/i1120s .pdf (indicating that Schedule K is a summary schedule of aH shareholders' shares of the corporation's income, deductions, credits, etc.).
to be able to pay the proffered wage using those net current assets. The petitioner's tax returns demonstrate its net current assetS as shown in the table below:
J L
- In 2010, the Form 1120S stated net current assets of -$17,696.00.
- The petitioner did not provide its tax return for 2011.
. I
Therefore, for the years 2010 and 2011, the petitioner failed to establish its ability to pay the difference b~tween the proffered wage and wages already paid to the beneficiary through 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 H had the ability to pay the proffered wage. Counsel infers 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 did not submit any evidence on appeal. Although counsel indicated on the Form I-290B that he would be filing a brief within 30 days of the appeal, which is dated May 29, 2012, to date there has been no additional documentation filed on behillf of the petitioner.
USCIS 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 Mqtter of Sonegawa, 12 l&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 T.,ime 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. 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, 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 p. 7 employee or an outSourced service, or any other evidence that USCIS deems relevant to the · petitiop.er'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 in the relevant years. 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. The petitioner has not demonstrated the occurrence of any unch~uacterisiic business expenditures or losses in 2010 that would have directly affected its ability to pay the proffered wage. The record · is not persuasive in establishing that the job offer was realistic.
Accordingly, the evidence submitted do~~ 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, B U.S.C. § 1361. The petitioner has not met that burden.
ORDER: The appeal is dismissed.