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During a recent IRS audit, the revenue agent decided that the Parker family used their closely held corporation, Falco, to avoid shareholder tax by accumulating eamings beyond the reasonable needs of the business. Faico's taxable income was $810,000, it paid no dividends, and it had no business need to retain income. Falco's marginal tax rate in prior years was 34 percent. Assume the accumulated earnings tax rate is 20% for all applicable years in this problem. Required: a. Compute Folco's accumulated earnings tax assuming that it had accumulated $4 milion after-tax income in prior years. Assume that for these years at issue, a corporation is exempt up to $250,000 of accumulated earnings without demonstrating a reasonable business need for the accumulation. b. Compute Falco's accumulated earnings tax assuming that it had accumulated $121,000 after-tax income in prior years. Assume that for these years at issue, a corporation is exempt up to $250,000 of accumulated earnings without demonstrating a reasonable business need for the accumulation. (8) Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Compute Falco's accumulated earnings tax assuming that it had accumulated $4 million after-tax income in prior years (Enter your amwer in dollars and not in mitions of dollars. During a recent IRS audit, the revenue agent decided that the Parker family used their closely held corporation, Falco, to avoid shareholder tax by accumulating eamings beyond the reasonable needs of the business. Faico's taxable income was $810,000, it paid no dividends, and it had no business need to retain income. Falco's marginal tax rate in prior years was 34 percent. Assume the accumulated earnings tax rate is 20% for all applicable years in this problem. Required: a. Compute Folco's accumulated earnings tax assuming that it had accumulated $4 milion after-tax income in prior years. Assume that for these years at issue, a corporation is exempt up to $250,000 of accumulated earnings without demonstrating a reasonable business need for the accumulation. b. Compute Falco's accumulated earnings tax assuming that it had accumulated $121,000 after-tax income in prior years. Assume that for these years at issue, a corporation is exempt up to $250,000 of accumulated earnings without demonstrating a reasonable business need for the accumulation. (8) Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Compute Falco's accumulated earnings tax assuming that it had accumulated $4 million after-tax income in prior years (Enter your amwer in dollars and not in mitions of dollars

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