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Strengthening I-140 Financial Ability Evidence In The Dawn Of Denials Without RFEs

by Romulo E. Guevara


During the spring of this year, U.S. Citizenship and Immigration Services’ (USCIS) associate director of Operations, William Yates, penned several memoranda as first steps toward backlog reduction. These were pursuant to the USCIS goal to eliminate the backlog and ensure a six-month or less processing for all case-types by end of 2006.1 Backlog reduction has been a goal first unveiled shortly before the September 11, 2001, terrorist attacks.2 Speaking at the 2004 AILA Annual Conference in Philadelphia, Yates remarked that subsequent to the terrorist attacks, national security became the agency’s primary focus over backlog reduction. But as time has passed, Yates said USCIS wants to return to backlog reduction while balancing its obligation to secure our borders. The memoranda, he assured, were the first efforts to "turn the ship around."

Backlog reduction is indeed a reality. Among the other initiatives in the Backlog Reduction Plan currently in operation are:

  • Electronic filing of certain petitions and applications;3
  • InfoPass, a USCIS online structured appointment system at local offices, which allows the scheduling of appointments at local offices for the purposes of eliminating the long lines and waiting periods for information and other services;4
  • USCIS online case status updates through customer enabled portfolios, where receipt numbers are entered and e-mails are subsequently generated upon any activity on a pending case (request for evidence, approval, or denial);
  • Decisions without Requests for Evidence (RFEs)5 based on the information available in the case file that is intended to eliminate unnecessary RFEs;
  • Instituting deference to prior filings in the context of extensions to prevent unnecessary readjudication;6
  • Rapid Adjustment Pilot Programs where an adjustment of status interview in spouse cases are scheduled by the district office between 60 and 90 days from the filing date;7
  • Long-term Employment Authorization Documents (EADs) will soon have validity dates of up to five years to eliminate the redundant EAD extension applications for people in long-term case processing (i.e., I-485s)
  • Concurrent adjudication of I-140/I-485s: USCIS has also mandated the concurrent adjudication of concurrently filed Forms I-140 and I-485.8 These petitions were once considered separate workloads and thus, adjudicated under their respective processing dates. Under the backlog reduction initiatives, these cases will be adjudicated together based only on the I-140 processing times.

At the end of FY03, there were 3.7 million cases in the backlog that USCIS plans to eliminate over the next three years.9 During the AILA conference, Yates revealed that ability to pay issues were a common source of difficulty for adjudicating officers. On the one hand, adjudicating officers have been working in a climate of fear since the September 11 attacks; they fear approving a case for someone that may in the future harm the United States. On the other hand, adjudicating officers also want to be sure every case is bona fide. For example, in I-140 contexts, officers’ concern rests on whether the petitioning companies are viable entities capable of paying the proffered wage.

The increase in the backlog has been partly the result of long delays in security clearances, but also, as suggested in the Backlog Reduction Plan, the redundant and unnecessary issuance of RFEs on a variety of issues including ability to pay in the I-140 context. Yates remarked that by issuing field guidance on specific areas of case adjudication, officers will be in a better position to adjudicate cases faster and more efficiently, thus contributing to the backlog reduction goal. According to USCIS, since the end of FY03, backlog reduction initiatives have reduced the backlogs by more than 360,000 cases.10 This article analyzes the financial ability memo and its narrow application of the regulatory requirements in 8 CFR §204.5(g)(2). It will explore the different accounting elements that can be analyzed and presented to USCIS. The article will also review relevant case law and other materials that will show that, despite the Yates memo, a "totality of the circumstances" test should be the proper standard of review to ensure a fair and successful I-140 adjudication where ability to pay may not be necessarily obvious upon a cursory perusal of a petitioner’s financial documents.


The economic downturn that began in 2001 has not yet reversed. Many I-140 petitioners have shown losses in their financial records that at first glance may not appear to support a favorable USCIS decision. In turn, adjudicators began to closely scrutinize the ability to pay component in I-140 petitions by generating detailed RFEs to allow petitioners to show their financial viability. However, since the issuance of the ability to pay memo earlier this year, practitioners have reported a rising incidence of I-140 denials without RFEs.

The relevant regulation at 8 CFR §204.5(g)(2) states:

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. In a case where the prospective United States employer 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 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.12

Initial evidence - As stated in the regulations, initial evidence includes annual reports, federal income tax returns, or audited financial statements.

Discretionary evidence - The regulation states, "In a case where the prospective United States employer 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 proffered wage."13 Subsequently, the regulation lists discretionary evidence that may be asked for by USCIS or submitted by the petitioner in appropriate cases. By using the phrase, "in appropriate cases,"14 to preface what additional evidence is permissible, the drafters intended for the financial ability regulation to have three tiers: (1) required evidence; (2) discretionary evidence for companies with 100 or more employees; and (3) discretionary evidence in general. Discretionary evidence, in turn, refers to (a) profit/loss statements; (b) bank account records; or (c) personnel records.15

The Ability to Pay Memo was issued as interim procedural guidance to adjudicators in anticipation of regulatory amendments to 8 CFR §204.5(g)(2). Specifically, the memo instructs adjudicators to ensure the Form I-140 is complete and to review the file for any missing initial evidence. An RFE must be issued if initial evidence is missing or incomplete.

Initial Evidence

This memo continues by providing further instruction on how the initial evidence should be used to determine ability to pay the proffered wage. Unfortunately, such instruction unnecessarily limits the financial ability examination to any one of the following three equations:

"(1) Net income - The initial evidence reflects that the petitioner’s net income is equal to or greater than the proffered wage.

(2) Net current assets - The initial evidence reflects that the petitioner’s net current assets are equal to or greater than the proffered wage.

(3) Employment of the beneficiary - The record contains credible verifiable evidence that the petitioner not only is employing the beneficiary but also has paid or currently is paying the proffered wage."

If none of these formulas establishes ability to pay, the memo notes that adjudicators may deny the petition without first issuing an RFE. These formulas disregard long-accepted practices that have used a combination of any of the three options listed above. For example, in a case where the proffered wage is $90,000 per year, and the beneficiary received wages of $60,000 in the year the priority date was established, the petitioner would need to document $30,000 to establish ability to pay. Under the first option in the memo, if the petitioner’s net income was $20,000, the petitioner would not meet the financial ability test because of a $10,000 deficit ($30,000 - $20,000 = $10,000). Consequently, the case would be denied. If the third option is used, the financial ability test would also fail because the beneficiary was paid less than the proffered wage. The second option is the most limited in that it uses the net current assets analysis in a substantially narrower way than accepted practices.

Discretionary Evidence

The Ability to Pay Memo holds that the discretion is on the part of the adjudicator. If he or she decides to accept the discretionary evidence, the evidence must clearly establish the petitioner’s financial ability. Yates suggests that each piece of evidence must conclusively show financial ability, rather than allow an adjudicator to make a pragmatic assessment based on the totality of the circumstances.

The memo also interprets the regulation to permit the submission of other financial evidence in lieu of the initial required evidence where the petitioner employs more than 100 employees (tying the second and third tiers). Discretionary evidence could always have been submitted to bolster either the required initial evidence or for companies with 100 employees or more. But more disturbing is the expansion of this requirement. Yates states in the Ability to Pay Memo that "regardless of the number of employees the petitioner employs, CIS adjudicators are not required to accept, request, or RFE for additional evidence. Acceptance of these documents by CIS is discretionary." The unfortunate conclusion is that if the initial evidence submitted does not establish petitioner’s financial ability to pay the proffered wage, adjudicators are permitted to deny the petition without an examination of discretionary evidence.

Prior to issuance of this memo, petitioners had the option to demonstrate financial ability by submitting bank statements for each calendar year, beginning in the year the priority date was established and continuing onward. The average of the ending bank balance in a 12-month period, added to the beneficiary’s paid wages, net income or net assets, can prove financial ability. Petitioners have also used profit/loss statements and personnel records to show available cash flow and ability to meet their payroll obligations. In today’s economy, it is unrealistic to expect a single financial document to establish a petitioner’s ability to pay without permitting a petitioner the opportunity to provide additional evidence as the regulations allow.


The Ability to Pay Memo does a disservice to petitioner and beneficiaries alike. The regulations specifically state that "the petitioner must demonstrate [ability to pay the proffered wage] at the time the priority date is established and continuing until the beneficiary obtains lawful permanent residence."16 The totality of the circumstances test should be restored as the most practical and realistic standard of review in today’s sluggish economy.

For instance, the Ability to Pay Memo would have done better to implement guidelines from the minutes of the Eastern Service Center (ESC)/AILA Liaison Teleconference of November 16, 1994 (Liaison Minutes),17 where the then-director of the Eastern Service Center offered these helpful observations:

  • If the taxable income on the petitioning company’s submitted tax return, for the period covering the priority date for the I–140, is at least as high as the wage offered, the ESC will generally assume that it can afford to pay the wage.
  • If the taxable income is negative even though the beneficiary is not yet employed by the petitioner, ESC will generally assume that the petitioner can handle the additional salary if, according to its tax return, it has a favorable enough ratio of total current assets to total current liabilities.
  • In the case of a sole proprietorship, the ESC may consider the proprietor’s personal assets and liabilities.
  • It will look closely, however, at the argument that the hiring of the beneficiary will turn an unprofitable company into one that can pay his or her salary.
  • A positive retained-earnings figure does not guarantee the ability to meet a larger payroll.
  • Depreciation can generally be considered with taxable income in evaluating the ability to pay the additional employee.
  • Where the evidence is not self-explanatory, pertinent figures should be highlighted and guidance offered on how the documentation establishes the ability to pay. (Emphasis added.)

Applying these liaison minutes would give a more realistic picture to the financial ability of the company. For example, item (2) suggests that the ratio analysis can be used if there is negative net income and the beneficiary is not yet employed by the petitioner. The rationale is that a favorable ratio suggests the petitioner can handle an additional salary even when there is a loss in the tax year.

Liquidity Ratio Analysis

Liquidity ratios measure the short-term liquidity of a company.18 The two most common liquidity ratios used are the Current Ratio and the Acid-Test Ratio (also referred to as the Quick Ratio). The Current Ratio measures the short-term debt-paying ability, while the Quick Ratio measures the immediate short-term liquidity.19

The “Current Ratio Analysis” could be used to determine ability to pay, however, regardless of negative net income and employment of the beneficiary. According to generally accepted accounting principles, the Current Ratio is a widely used measure for evaluating a company’s liquidity.20 It is computed by dividing the current assets by current liabilities (typically in Schedule L of a corporate tax return). In general, current assets items include cash and other current assets. Current liabilities can include accounts payable, mortgages, notes, bonds payable in less than one year, and other current liabilities. The Current Ratio assumes (1) a regular cash flow and (2) that both accounts receivable and inventory can be readily converted into cash. A ratio of 2.0 is a common indicator of healthy financial viability.21 In general, when the Current Ratio falls below 1.0, it indicates that a company may be involved in financial difficulties. Therefore, even in its most basic use, the Current Ratio Analysis is a more realistic means to test financial ability than the net asset test described in the memo.

Unfortunately, the Ability to Pay Memo simply requires adjudicating officers to subtract current assets from current liabilities. In reality, businesses do not use such limited analysis to learn the realistic nature of their financial viability and liquidity. Each company’s liquidity ratios must be measured in the context of the industry in which they do business.

Let’s look at an example. Assume that Petitioner’s Current Ratios for 2002 (the year of filing the labor certification) and 2003 are as follows:

$1,500,000 (current assets)
$ 600,000 (current liabilities)
Current Ratio = 2.5:1

$1,000,000 (current assets)
$ 800,000 (current liabilities)
Current Ratio = 1.25:1

If the industry median average ratio22 in this petitioner’s area of business is 2.3:1, and the leading company in the industry shows a ratio of 1.35:1, the petitioner in this case will appear to be reasonably liquid. These ratios say that in 2002, for every $1 the petitioner had $2.50 of current assets available for use as ready cash. USCIS should take the industry levels into account to judge the liquidity of the company. Conversely, petitioners must provide this additional information to USCIS so that the adjudicator can make a sound decision in cases where the company cannot prove ability to pay under the strict memo rule.

Also, some practitioners use inventory as part of the current ratio formula. Because the Current Ratio is only a measurement of a company’s liquidity, it does not take into account the composition of the current assets in general.23 Caution is urged to disclose what items are included in the Current Ratio analysis. If the analysis is tied to inventory, which is considered slow-moving for purposes of liquidity, adjudicating officers may not be convinced that the petitioner has ready source of cash available to pay the proffered wage because of the inclusion of inventory into the equation.

The Acid-Test ratio is a compliment to the Current Ratio.24 The Acid-Test ratio measures a petitioner’s immediate short-term liquidity. It is computed by dividing the cash, marketable securities.25 Let’s look at an example with the same filing years as in the analysis above.

Cash $150,000
Marketable Securities $140,000
Receivables $500,000
Total: $790,000
Liabilities $600,000
Ratio = 1.31:1

Cash $100,000
Marketable Securities $125,000
Receivables $400,000
Total $625,000
Liabilities $800,000
Ratio = .78:1

If the industry median average is .90:1 and the leading company shows a Acid-Test Ratio of 1.05:1, even though petitioner’s ratio declined in 2003 and the industry median is 1.05:1, petitioner’s Acid-Test Ratio is arguably adequate.


Another item discussed in the Liaison Minutes is depreciation.26 The amount in depreciation can be added to net income, wages paid to the beneficiary, and the ratio analysis. Depreciation by definition is not considered a loss.27 USCIS has insisted in past RFEs, however, that it does not look at depreciation unless the petitioner can identify the actual cash equivalent of the depreciated amount. Petitioners should include this additional material in their analysis of financial ability where depreciation is used. For instance, if depreciation includes office equipment or machinery, evidence showing its purchase or photos of the items should be included in the petition, along with identification to it in the petitioner’s tax return and schedules.

Item 7 of the Liaison Minutes states, “Where the evidence is not selfexplanatory, pertinent figures should be highlighted and guidance offered on how the documentation establishes the ability to pay.”28 In many instances, petitioner’s corporate tax structure or accounting system affects how the tax return will be prepared and what the net income will be. Among these are S corporations, the accrual system of accounting, and the way current assets are reflected in the returns as liabilities for tax purposes.

S Corporations

Type S corporations are passthrough entities in terms of their taxation, since the income of an S corporation is generally subject to just one level of tax; that is, only to the corporation’s shareholder.29 Therefore, the objective in these corporations is to minimize the tax liability to the shareholders. Petitioners must educate adjudicating officers in the nature of its corporate structure for tax purposes. In doing so, the officer will be able to understand why the figures reflect low amounts, yet maintain liquidity and viability for purposes of its ability to pay the proffered wage.

For example, many corporations (S corporations or C corporations) use the "Accrual Basis Accounting System." This system allows a company to show expenses intended to benefit the next accounting period but made payable in the current year are recorded and included. Hence, the petitioner may declare such "next-year expenses" as "Other Current Liabilities" (IRS Form 1120S, Schedule L, Line 18, page 4, Attachment p.2), and argue that it had available funds to pay the proffered wage. Sometimes, even if the Liquidity Ratios appear insufficient, the accrued expenses might be high enough to argue petitioner’s ability to pay.

Another example of ways to argue ability to pay is, again in the context of an S corporation, whether the petitioner has issued a loan to its shareholders for the purposes of reducing its tax liability. For example, if petitioner realized gross receipts or sales in the sum of $1,316,625 and Schedule L of the same tax return also shows that "Other current liabilities" in the form of a loan to shareholders totaling $277,104, petitioner can argue that this amount consists of a discretionary fund available to it in the event that ready cash is needed. Thus, loans to shareholders in this context are not in reality a liability, but an asset. Sometimes, corporations take this action on the advice of an accountant, and categorized the loan as "Loans from shareholders" under "Other current liabilities" for the purpose of reducing tax liabilities. A recent AAO decision held that DHS must consider the normal accounting practices of the company even if the ability to pay is not reflected in the tax returns.30 Also, where funds are pledged to petitioner, it should be considered part of the ability to pay analysis.31 Therefore, adjudicating officers should respect a petitioner’s normal accounting practices. The Ability to Pay Memo’s restrictive view of how to make such determinations should be the beginning of the inquiry into financial ability - not the only test.

Case Law

A review of the ability to pay case law reveals that a totality of the circumstances is generally the standard used. The Ability to Pay Memo also disregards Matter of Sonegawa,32 the seminal case on this issue. Sonegawa allows an employer to show ability to pay if it has a reasonable expectation of future financial profit, such that the ability to pay the proffered wage is fulfilled upon the alien obtaining permanent residence.33 Thus, an employer’s expectations of future financial profit are reasonable if:

  • an employer shows it has been making a living and employing people without any evidence of financial difficulties;
  • the employer establishes that it incurred unusual expenses in the year of filing that temporarily worsened its financial situation;
  • the employer shows a significant increase in income in the years subsequent to the filing of the petition as established by relevant professionally prepared financial documents.34

Since the issuance of the Ability to Pay Memo, USCIS has denied Form I-140 petitions without RFEs citing the three options of the Ability to Pay Memo. Yet, in other cases, USCIS has relied on K.C.P. Food Co., Inc. v. Sava,35 in support of its contention that the petitioner’s tax return did not establish its ability to pay the proffered wage. The issues in K.C.P. Food were whether the petitioner had ability to pay and whether the Associate Commissioner’s interpretation of petitioner’s corporate tax return was an abuse of discretion.36 The main problem with the petitioner in that case was his failure to present all the available financial documents and analysis thereof at the administrative appellate level. Based on the record before the U.S. district court, the judge found no abuse of discretion in that the petitioner’s corporate tax return did in fact show that it did not have the ability to pay the proffered wage. USCIS has been using this case as its authority for denying I-140 petitions on the basis that the corporate tax return does not clearly show ability to pay. However, K.C.P. Food Co., Inc. v. Sava, was decided in 1985, while the Ability to Pay Memo directing USCIS officers to consider present payment of the proffered wage, was issued on May 4, 2004. K.C.P. Food Co., Inc. v. Sava, also did not deal with the situation involving an employee who is already on the payroll of the employer. Even in dicta, the court in this case said, citing Sonegawa, that had the petitioner showed the supplementary evidence he attempted to submit at the federal review level, the outcome might have been favorable.

These cases should be used contrast to the Ability to Pay Memo and the recent decisions. Recent nonprecedent decisions from the Appeals Administrative Office (AAO) should be used as guidance to determine a petitioner’s ability to pay. For instance, the AAO has indicated that wage reports showing that the person was actually paid during the year when labor certification was filed can be a source of proof that the petitioner has the ability to pay the proffered wage.37 In another AAO decision, it was held that DHS must consider the normal accounting practices of the company even if the ability to pay is not reflected in the tax returns.38 A beneficiary’s ability to generate income can be used when determining a petitioner’s ability to pay.39 Pledged funds to petitioner can be considered as part of ability to pay.40 If the petitioner is a sole proprietorship, the proprietor’s individual assets can be considered toward ability to pay.41 All these cases show that a totality of the circumstances test has always been the way to judge the complex ability to pay issues.

Notwithstanding the Ability to Pay Memo, this writer urges practitioners not to be discouraged by its narrow purview. Every case that does not clearly fit under the strict regulatory interpretation in the memo should be analyzed and presented to USCIS using some or all of the suggestions presented above. Practitioners ought to continue to advocate a totality of the circumstances test as the unified standard of review in ability to pay cases. As illustrated in this article, such a standard of review allows a more encompassing and realistic method of evaluating a company’s financial health. An employment-based immigrant petition is, in essence, an offer of future employment. The petitioner is not obligated to pay the proffered wage until the beneficiary’s legal permanent residence is granted.42 Therefore, because the language of the regulation allows a wide range of time (from the establishment of the priority date to the grant of permanent resident status) to show ability to pay, flexible methods of evaluating a petitioner’s financial ability should be used. Practitioners are strongly advised to document petitioner’s ability to pay using both required and discretionary evidence to prevent denials without RFEs. Because USCIS is going full throttle on backlog reduction, each case should be prepared with the assumption that no RFE will be issued. Therefore, the strongest possible case should be presented, as a matter of course, at the initial filing.


The first efforts of USCIS to reduce the backlogs agencywide offer a mixed bag of solutions. Backlog reduction initiatives should be implemented in a way that is not detrimental or a disservice to petitioners and beneficiaries. The Ability to Pay Memo offers too narrow a view on the determination of a petitioner’s capacity to pay the proffered wage. The Ability to Pay Memo should be reconsidered and broadened to reflect realistic valuation methods using the totality of the circumstances test. In the interim, practitioners are urged to present their I-140 petitioners’ ability to pay cases using a smorgasbord of evidence, as deemed relevant, including required and discretionary evidence, Liquidity Ratio analyses, depreciation, reasonable expectation of future income, and other principles in established and emerging case law, and a clear explanation of the petitioner’s corporate tax structure and accounting methods that show sources of ready cash. With such complete filings, this writer believes adjudicating officers will be more amenable to reviewing discretionary other evidence if it is contained in the file before them. To do otherwise will result in a massive increase in appeals to the AAO and sustained uncertainty for petitioners and beneficiaries alike.

Copyright © 2004, American Immigration Lawyers Association. Reprinted, with permission, from Immigration's New Age - Discovery, Adaption, and Survival 27 (2004 AILA New York Chapter Symposium Handbook).

1 The update to the original "Backlog Reduction Plan" was unveiled by USCIS Director, Eduardo Aguirre, on June 16, 2004. The plan can be viewed on the USCIS Web site at

2 Id.

3 In May 2003, USCIS began the electronic filing program with Forms I-90 and I-765. In May 2004, Forms I-129, I-131, I-140, I-539, I-821, and I-907 were added. Information om this program can be obtained at

4 InfoPass began as a pilot program in Dallas during April 2004. It was expanded gradually across the country. As of the end of September 2004, InfoPass is available nationwide.

5 USCIS Memorandum "Requests for Evidence (RFE)" (May 4, 2004), posted on AILA InfoNet at Doc. No. 04050476 (May 4, 2004) (hereinafter RFE Memo). This memo stipulates that an RFE is not required prior to final adjudication. The RFE memo affirms that adjudicating officers may deny an application or petition without issuing an RFE if there is evidence of clear ineligibility or the record is complete, the two circumstances where an RFE is not required and outright denial is permissible. See 8 CFR §§103.2(b)(8) and 103.2(b)(1), respectively.

According to this memo, "clear ineligibility exists when an applicant or petitioner does not meet a basic statutory or regulatory requirement." For instance, if an applicant or petitioner fails to establish eligibility for the requested benefit, or if he or she clearly fails to meet a substantive requirement needed to establish eligibility for the benefit sought, USCIS may deny the case without first issuing an RFE. The RFE memo also gives several examples of clear ineligibility, including: a petitioner seeking to file a Form I-130 who is not a qualifying relative; a petitioner in an L case who does not have the required relationship to a foreign company abroad; an E-1 treaty trader or E-2 treaty investor who is not a national of a country with a qualifying treaty with the United States; or a beneficiary whose education documents clearly establish that he or she does not have the required degree or equivalency for H-1B status.

Similarly, the record is considered complete if "all required initial evidence as specified in the regulations and on the application or petition and accompanying instructions" is submitted. If the "record is complete," the adjudicator is not required to obtain further documentation that would support a decision. A denial may be issued if the applicant or petitioner has not met his or her burden to establish eligibility for the benefit sought. As an example of when the "record is complete," the memo cites to the regulations at 8 CFR §204.5, which lists the required initial evidence necessary to establish "ability to pay" in the context of an I-140 petition. The memo notes that should the petitioner submit only one of these documents, the adjudicator may determine that such document does not establish ability to pay, and therefore deny the petition on the basis that the applicant has not met his or her burden to establish eligibility.

6 USCIS Memorandum, "The Significance of Prior CIS Approval of a Non-Immigrant Petition in the Context of a Subsequent Determination Regarding Eligibility for Extension of Petition Validity," HQOPRD 72/11.3 (Apr. 23, 2004), posted on AILA InfoNet at Doc. No. 04050510 (May 5, 2004).

7 The Rapid Adjustment Pilot Program began in Dallas and has expanded to several other districts including New York City. Although planned as a temporary program set to end on September 30, 2004, at the October 2004, AILA New York Chapter meeting with the New York district directors, Gwen McPhearson, announced that the Rapid Adjustment Program had been extended indefinitely.

8 USCIS Memorandum (Fujie Ohata), "Procedural Instructions for Concurrent Adjudication of Concurrently Filed Form I-140 Immigrant Petition for Alien Worker and Form I-485 Application for Adjustment of Status," 90/16.45 (Mar. 31, 2004), posted on AILA InfoNet at Doc. No. 04041668 (Apr. 16, 2004).

9 See Backlog Reduction Plan update, supra note 1.

10 Id.

11 USCIS Memorandum (Yates), "USCIS Issues Guidance on Determination of Ability to Pay" (May 4, 2004, posted on AILA InfoNet at Doc. No. 04051262 (May 12, 2004) (hereinafter Ability to Pay Memo).

12 8 CFR §204.5(g)(2).

13 Id.

14 Id.

15 Id.

16 Id. See also 20 CFR §656.20(c)(2); Matter of Great Wall, 16 I&N Dec. 142 (R.C. 1977); Matter of Sonagawa, 12 I&N Dec. 612 (R.C. 1967).

17 See AILA Monthly Mailing 44, 46-47 (Jan. 1995).

18 Weygant, Jerry T., Donald E. Kieso, and Paul D. Kimmel, Accounting Principles (Selected Chapters) 843 (5th ed., John Wiley & Sons, Inc., New York 1999).

19 Id.

20 Id. at 829.

21 Pinches, George E., Essentials of Financial Management, 565-66 (5th ed., Harper Collins College Publishers, New York 1996).

22 The local Chamber of Commerce is a helpful resource for obtaining the industry median average ratios for your petitioner’s relevant industry.

23 Weygandt, et. al., supra note 18, at 829.

24 Id.

25 "Marketable securities" are short term investments that are quickly converted to cash with little or no principal (certificates of deposit, mortgages, bonds, etc., payable in less than one year). Liquid assets, therefore, are a company’s cash plus its marketable securities. See Pinches, supra note 21, at 470.

26 See item 6 of the Liaison Minutes, above.

27 Depreciation is an annual income tax deduction that allows the recovery of the cost or other basis of certain property over the time the property is used. Generally, it is an allowance for the wear and tear, deterioration, or obsolescence of the property. See 26 USC §§167(a) and (c).

28 See Liaison Minutes, above.

29 26 USC §§1361- 1363 and 1371(e)(2).

30 Matter of X, EAC 01-018-50413 (AAO Jan. 31, 2003) (Vermont Service Center), reported in 8 No. 18 Bender’s Immig. Bull. 1528-29 (Sept. 15, 2003) (where sole shareholder of medical corporation routinely minimizes taxable income by taking it as compensation to avoid double taxation, the net profit on the return should not control).

31 Full Gospel Portland Church v. Thornburgh, 730 F. Supp. 441, 449 (D.D.C. 1988).

32 12 I&N Dec. 612 (Reg. Comm’r 1967).

33 Id.

34 Id.

35 623 F. Supp. 1080 (S.D.N.Y. 1985)

36 Id. at 1088.

37 See Matter of X, WAC 02-208-52485 (AAO Aug. 6, 2003) (California Service Center).

38 Matter of X, EAC 01-018-50413 (AAO Jan. 31, 2003) (Vermont Service Center), reported in 8 No. 18 Bender’s Immigr. Bull. 1528-29 (Sept. 15, 2003).

39 Masonry Masters, Inc. v. Thornburg, 875 F.2d 898 (D.C. Cir. 1989).

40 Full Gospel Portland Church v. Thornburgh, 730 F. Supp. 441, 449 (D.D.C. 1988).

41 Matter of Ranchito Coletero, 02-INA-105 (BALCA Jan. 8, 2004 ) (en banc).

42 8 CFR §204.5(g)(2). See also 20 CFR §656.20(c)(2).

About The Author

Romulo E. Guevara is a senior attorney with Neil A. Weinrib & Associates in New York City, where he focuses on complex business immigration issues for both large corporations and small businesses. He received his undergraduate degree in 1993 from Long Island University and his law degree in 1996 from Hofstra University School of Law. Mr. Guevara is originally from El Salvador and has been practicing immigration law since 1997.

The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.

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