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 earnings beyond the reasonable

needs of the business. Falco$$s taxable income was $$1,000,000,$ 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.$$Required:$$