Degree or an Alien of Exceptional Ability Pursuant to Section 203(b)(2) of the IID1Digration 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 Form I-290B, Notice of Appeal or Motion, with a fee of $630. The specific requirements for fili~g 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;.S(a)(l)(i) requires any motion to be filed within 30 days of the ·decision that the motion seeks to reconsider or reopen.
Ron Rosenberg
Acting Chief, Administrative Appeals Office
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 a chiropractic center. It seeks to employ the beneficiary permanently in the United States as a health diagnosing and treating practitioner pursuant to section 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 according! y.
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 April 26, 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 ~e 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 October 7, 2009. The proffered wage as stated on the ETA Form 9089 is $91,050 per year. The ETA Form 9089 states that the position requires a Master's degree, five years of work experience, and a New York acupuncture license.
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, mcluding 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 2002 and to currently employ four 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 October 12, 2011, the beneficiary claimed to have worked for 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 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, provided Forms W-2 for 2009, 2010, and 2011, and demonstrated that it paid the beneficiary $60,883, $54,246, and $46,370, respectively, 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 2009, 2009 and 2010.
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 (151 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 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.F.R. § 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).
I'
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. lll. 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 KC.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 depreci~tion 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).
As an alternate means of determining the petitioner's ability to pay the proffered wage, USCIS may review the petitioner) net current assets. Net current assets are the difference between the petitioner's current assets and current liabilities? A corporation's year-end current assets are shown 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 p. 5 PageS 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. j
The record before the director closed on February 21, 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 and net current assets for 2009 and 2010, as shown in the table below.
Tax Year Proffered Net Income* Total
CA CL Totat2 Wage
2009 $91,050 -$15,012 -$106,062 $150 -$37,383 -$128,283 2010 $91,050 -$28,190 -$119,240 $5,329 -$39,044 -$124,765 Net Income* Ordinary income (loss) from trade or business activities (Line 21-IRS Form 1120S); OR Sch. K income (loss) line 18. Total is the difference between proffered wage and net income; Total2 is. the difference between the proffered wage and CA plus CL (net current assets).
Therefore, for the years 2009 and 2010, the petitioner did not have sufficient net income or net current assets to pay the proffered wage. The record is also devoid of evidence that the petitioner could have paid the full proffered wage in 2011.
Therefore, from the date the ETA Form 9089 was accepted for processing by the DOL, the petitioner had not established that it had the ability to pay the beneficiary the proffered wage as of the priority date through an exam~ation of wages paid to the beneficiary, its net income, or its net curre11:t assets. Counsel asserts on appeal that the director failed to give appropriate consideration to the petitioner's status as a personal services corporation (PSC), and that the assets of the corporation's owner are pertinent in determining the petitioner's ability to pay the proffered wage. Moreover, counsel has offered an opinion letter from the petitioner's accountant JClaims not backed by documents
The assertions of counsel do not constitute evidence. Matter of Obaigbena, 19 I&N Dec. 533, 534 (BIA 1988); Matter of Ramirez-Sanchez, 17 I&N Dec. -503,506 (BIA 1980).
Counsel argues that the petitioner should be considered a PCS. Nevertheless, the petitioner filed a Form 1120S as an "S" corporation. As with both PSCs and S corporations, the sole shareholder of a corporation has the authority to allocate expenses of the corporation for various legitimate business purposes, including for the purpose of reducing the corporation's taxable income. Compensation of officers is an expense category explicitly stated on the. Form 1120S U.S. Corporation Income Tax Return. For this reason, the petitioner's figures for compensation of officers may be considered as one year, such accounts payable, short-term notes payable, and accrued expenses (such as taxes and salaries). /d. at 118.
·, . . - additional fmancial resources of the petitioner, in addition to its figures for ordinary income. The documentation presented indicates that holds one hundred percent of the company's stock and performs the personal services of the chiropractic practice. According to the forms 1120S for 2009 and 2010, elected to pay himself $35,200 and $14,700, respectively. We note here that the compensation received by the company's owner during these two years was not a fixed salary. Even if the sole owner redirected all of his wages to the beneficiary's salary, this would still have been insufficient in 2010.
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). In a similar case, 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 ...
In examining a petitioner's ability to pay the proffered wage, the fundamental focus of the USCIS' determination is whether the employer is making a realistic job offer and has the overall financial ability to satisfy the proffered wage. Matter of Great Wall, 16 I&N Dec. 142, 145 (Acting Reg'l Comm'r 1977). Accordingly, after a review of the petitioner's federal tax returns and all other relevant evidence, we conclude that the petitioner has not established that it had the ability to pay the salary offered as of the priority date of. the petition and continuing to present.
Counsel's reliance on the accountant's opinion is misplaced. Going on record without supporting documentary evidence is not sufficient for purposes of meeting the burden of proof in these proceedings. Matter of Soffid, 22 I&N Dec. 158, 165 (Comm'r 1998) (citing Matter of Treasure Craft of California, 14 I&N Dec. 190 (Reg'l Comm'r 1972)).
Further, 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 US CIS 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.
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 Matter ofSonegawa, 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 . petitioner changed business locations and paid rent on both the old and new locations for five· months. There were large moving costs aE-d also a period of time wh~n the petitioner was unable to p. 7 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 w~ 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 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 with only $233,000 in gross receipts in 2010. The petitioner claims to employ four employees, its salary and wages have only marginally increased, and no evidence of a reputation within the industry was submitted. The petitioner does claim to have had a drop in business beginning in 2009 based on the owner's health and personal circumstances. However, in analyzing the petitioner's net income, wages and s~aries paid to four employees, officer compensation, and gross receipts, we find it more likely than not that the petitioner could not establish its ability to pay the proffered wage.3 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.