Owl is a closely held corporation owned by eight shareholders (each owns 12.5% of the stock). Its taxable income for the most recent year was $6,250,000. 

a. Calculate Owl’s Federal income tax liability if it is a C corporation. 

b. Calculate Owl’s Federal income tax liability if it is an S corporation. 

c. How would your answers in parts (a) and (b) change if Owl was not closely held (e.g., 5,000 shareholders with no shareholder owning more than 2% of the stock)?