Forward Corporation is owned by a group of 15 shareholders. During the current year, Forward pays $550,000 in salary and bonuses to Alvin, its president and controlling shareholder. The corporation’s marginal tax rate is 34%, and Alvin’s marginal tax rate is 39.6%. The IRS audits Forward’s tax return and determines that reasonable compensation for Alvin is $350,000. Forward agrees to the adjustment. What effect does the disallowance of part of the salary and bonus deduction have on Forward’s and Alvin’s respective tax positions? Ignore payroll taxes, such as FICA.