Advanced Degree or an Alien of Exceptional AbiUty 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 rp.ust 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 filing such a motion can be found at 8 C.F.R. § 103.5. Do not tile 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,_
Ron Rosenberg
Acting Chief, Administrative Appeals Office · www.uscis.gov
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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 software solutions provider. It seeks to employ the beneficiary permanently in the United States as a senior business systems analyst. 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 establ~shed 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 31, 2010 denial, the 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.
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 June 3, 2008 .. The proffered wage as stated on the ETA Form 9089 is $100,000.00. The ETA Form 9089 states that the position requires a master's degree in computer science, information systems, business administration, management or engin·eering. · In the alternative, the position requires a bachelor's degree and five years of work experience.
The AAO conducts appellate review on a de novo basis. See Soltane v. DOJ, 381 F.3d 143, 145 (3d Cir. ~004). 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 2001 arid that it · currently employs 125 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 from November 1, 2006 to July 2, 2008.
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. Sef! MaUer 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 Mauer ofSonegawa, 12 I&N Dec. 612 (Reg. Comm. 1967). In determining the petitioner's ability to pay the proffered wage during a given period, USCI~ · 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. The record of proceeding contains copies of the beneficiary's IRS Forms W-2 as shown in the table below:
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- In 2008, the Form W·-2 stated total wages of $62,772.06 (a deficiency of $37,227.94).
- In 2009, the Form W-2 stated total wages of $74,189.61 (a deficiency of $25,810.39).
- In 2010, the Form W-2 sta:ted total wages of $83,858.96 (a deficiency of $16,141.04). '
- In 2011, the petitioner submitted a pay stub .with year-to-date wages paid in the amount of $16,214.00 as of AprilS, 2011.
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 figtire reflected on the petitioner's federal income tax return, without consideration of 1 The submission of additional evidence on appeal is ·allowed by t~e instructions to the Form I-290B, which are incorporated into the regulations at 8 C.F.R.-§ 103.2(a)(1). p. 4 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), ajf'd; No. 10-1517 (6th Cir. filed Nov. 10, 2011). Reliance on federal income tax returns as a basis for detennin"ing: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. lll. 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. $ee 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 gepreciation 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 acctimulation 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 bac;k 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 (emp~asis added).
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The petitioner's 2010 tax return is the most recent return available. The proffered wage is $100,000.00.
The petitioner's 1120S2 tax returns demonstrate its net income as shown in the table below:
- . In 2008, the Form 1120S stated net income of $211,398.00.
- . In 2009, the Form
1120S stated net income of $380,376.00.
- In 2010, the Forni 1120S stated net income of $408,154.00.
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 in a C corporation and an S corporation are the difference between the petitioner's current assets and current liabilities. 3 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 curren.t 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 its net current assets as shown in the table below: ·
- In 2008, the Form 1120S stated net current assets of -$124,200.00.
- In 2009, the Form
1120S stated net current assets of $430,010.00.
- In 2010, the Form 1120S stated net current assets of $647,603.00 .
. Although the net income amounts for 2008, 2009, and 2010 (and net current assets in 2009 and 2010) exceed the difference between the proffered wage and the wages paid to the beneficiary, USCIS electronic records indicate that the petitioner . has filed over one thousand additional immigrant and non-immigrant petitions since it was established in 2001. Consequently, USCIS must also take into account the petitioner's ability to pay the beneficiary's wages in the context of its overall recruitment efforts. Presumably, the petitioner has filed and obtained approval of the labor certifications on the representation that it requires all of these workers and intends to · 2 Where an S corporation's income is exclusively froiJI. 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 adjustments, net . . income is found on line 18 of Schedule K. See Instructions for Form 1120S, at http://www.irs.gov/pub/irs-pdf/ill20s.pdf (indicating that Schedule K is a sulnmary schedule of all shareholders' shares of the corporation's income, deductions, credits, etc.). .
employ them upon approval of the petitions. Therefore, it is incumbent upon the petitioner to demonstrate that it has the ability to pay the wages of all of the individuals it is seeking to employ. If we examine only the salary ·requirements relating to the ~-140 petitions, the petitioner would need to establish that it has the ability to pay rombined salaries of the beneficiaries. The petitioner must establish that it had sufficient funds to pay all the wages from the priority date and continuing to the present. If the instant petition were the only petition filed by the petitioner, the petitioner would be required to produee evidence of its ability to pay the proffered wage to the single beneficiary of the instant petition. However, where a. petitioner has filed multiple petitions for multiple beneficiaries which have been pending simultaneously, the petitioner must produce evidence that its job offers to each beneficiary are realistic, and therefore, that it has the ability to pay the proffered wages to each of the beneficiaries of its pending petitions, as of the priority date of each petition and continuing until the beneficiary of each petition obtains lawful permanent residence. See Matter of Great Wall, 16 I&N Dec. 142, 144-145 (Acting Reg. Comm. 1977) (petitiqner must establish ability to pay as of the date of the Form MA 7-50B job offer, the predecessor to the Form ETA 750 and ETA Form 9089). See also 8 C.F.R. § 204.5(g)(2). . . .
The petitioner has submitted evidence pertaining to dozens of simultaneously. pending Forms 1-140. The petitioner. submitted lists of the beneficiaries, .priority dates, proffered wages, and Forms W-2 indicating the wages paid to each of these beneficiaries who were employed during those years. Considering only those petitions having 2008 or earlier priority dates identified by the petitioner as active in 2008, the petitioner could not have paid the full proffered wages to all of these workers and to the beneficiary. For example, in 2008, the petitioner identified 12 petitions · it considers active and aeproved. The receiQt numbers of these petitions are: . ; and Just considering these 12 petitions aod the corresponding 2008 Forms W-2, the petitioner paid these workers $565,082 less than their combined proffered wages. As the petitioner only had $211,398 in net income in 2008, and negative net current assets, it is apparent that the job offers to these beneficiaries - and to the instant beneficiary - were not realistic at the proffered wages in 2008. It is further noted that the petitioner actually filed 26 Forms 1-140 in 2008 and 13 more in 2009, as well as hundreds of Form 1-129 nonimmigrant petitions. If the AAO were to consider all of the pending petitions, it is clear that the petitioner. could not have paid all of these people their proffered wages. Accordingly, the job offer to the beneficiary at the proffered wage was not realistic. Counsel asserts on appeal that the petitioner employs more than 100 employees and therefor it is allowed to submit a statement from the petitioner's chief financial officer attesting to that fact. The record contains a statement from who . indicated that he was the petitioner's chief financial officer. He also indicated that the petitioner currently employs 145 plus employees and by the end of 2011 the petitioner's gross revenues are projected to exceed $15 million dollars which was generated in 2010. In a case where the prospective United States e·mployer 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 p. 7 Page 7 · proffered wage. In appropriate cases, additional evidence, such as profit/loss statements, bank . account . records, or personnel records, may be submitted by the petitioner or requested by the Service.
Althdllgh the petitioner claims to employ 145 plus employees, the petitioner stated on the Form I-140 dated June 17, 2008, that it currently employed 125 workers. Doubt easton any aspect of the petitioner's proof may, of coirrse, lead to a reevaluation of the reliability and sufficiency of the remaining evidence offered in support of the visa petition. It is incumbent on the petitioner to resolve any inconsistencies in the record by independent objective evidence, and attempts to explain or reconcile such inconsistencies, absent competent objective evidence pointing to where the truth, in fact, lies, will not suffice.Inconsistencies in the record See Matter of Ho, 19 I&N Dec. 582, 591-592 (BIA 1988). ·Regardless, USCIS may accept a letter in cases where the petitioner employs over 100 workers. It is not required to accept this letter in lieu of the tax returns or. audited. fin'!flcial statements. In cases such as the present case, where the petitioner has filed over a thousand of simultaneously pending immigrant and non-immigrant petitions, the AAO will not accept such a letter as persuasive evidence of the petitioner's ability to pay the proffered wage to the beneficiary. On appeal, counsel asserts that many of the be~eficiaries have left the petitioner's employ as a result of petitions being denied, beneficiaries resigning, and revocation; and the assets needed to pay wages to the remaining beneficiaries far exceeds the proffered wage amounts. However, as noted above, the AAO analyzed only those petitions pending in 2008 and identified by the petitioner as active. The. AAO did not need to limit its analysis, but did so only to illustrate that, even if the denied, revoked, or withdrawn petitions were ignored, the petitioner could still not establish its ability to pay the wage. It is noted that denied, withdrawn, or revoked petitions only · cease being relevant for ability to pay. purposes once they are denied, withdrawn, or revoked. For the periods prior to their termination, such as in 2008, they would be relevant.. On appeal, counsel asserts that the director failed to consider all of the facts and evidence in the case in order to obtain an accurate account of the petitioner's fmancial ability to pay the proffered wage. Counsel also asserts that the petitioner's gross ·receipts have increased over time and that the petitioner has always met its payroll. Contrary to counsel's claims, reliance on the petitioner's gross receipts to establish the petitioner's ability to pay the proffered wage is misp~aced. As noted above, USCIS properly relies on the petitioner's net income, as stated on the petitioner's corporate tax returns. River Street Donuts, LLC v. Napolitano, 558 F.3d at 116; K.C.P. Food Co., Inc. v. Sava, 623 F. Supp. at 1084.
Although counsel claims p. 8 the proffered wage beginning on the priority date, taking into consideration the net income and net current asset amounts are equal to or greater than the proffered wage, and that the petitioner is employing the beneficiary and has paid · or is currently paying the· proffered wage. See Interoffice Memo. from William R. Yates, Associate Director of Operations, USCIS, to Service Center Directors and other USCIS officials, Determination of Ability to Pay under 8 CFR 204.5(g)(2), at 2, (May 4, 2004).
The AAO consistently adjudicates appeals in accordance with the Yates Memorandum.
However, .counsel's interpretation of the language in that memorandum is overly broad and does not comport with the plain language of the regulation at 8 C.F.R. § 204.5(g)(2) set forth in the memorandum as authority· for the policy guidance therein. The regulation requires that a petitioning entity demonstrate its continuing ability to pay the proffered wage beginning on the priority date. If USCIS and the AAO were to interpret and apply the Yates Memorandum as counsel urges, then in this particular factual context, the clear language in the regulation would be usurped by an interoffice guidance memorandum without binding legal effect. The petitioner must demonstrate its continuing ability to pay ·the proffered wage beginning on the priority date, which in this case is June 25, 2006.
Counsel submits a copy of the petitioner's bank statements for 2010. Reliance on the balances in the petitioner's bank account is misplaced. First, bank statements are not among the three types of evidenc~, 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. Seeond, 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), such as the petitioner's taxable income (income minus deductions) or the cash specified on Schedule L that was considered in determiiling the petitioner's net current assets.
The evidence presented on appeal cannot be concluded to outweigh the evidence of record that . demonstrates thatthe petitioner could not pay the proffered wage from the day the ETA Form 9089 was accepted for processing by the DOL.
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 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 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 desigiler whose .work had been featured in Time and p. 9 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 employee or an outsourced service, or any pther evidence thai' USCIS 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 in the relevant years. There are no facts paralleling those found in Sonegawa that are present in the instant inatter to a degree sufficient to establish that the petitioner had the ability to · pay. the proffered wage. Nor has the petitioner demonstrated the . occurrence· of any uncharacteristic . business expenditures or losses in 2008, 2009 · and 2010. Crucially, the record does not establish that the job offer was realistic. The petitioner has not established that it could have paid 'the beneficiary the full prof(ered wage and have paid the many other beneficiaries for which it had petitioned. · Accordingly, 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 proceedmgs rests solely with the. petitioner. Section 291 of the Act, 8 U.S.C. § 1361. The petitioner has not me~ that burden.
ORDER: The appeal is dismissed.