Problem: Module 9 Textbook Problem 10 Learning Objectlve: 9-7 Explain the purpose of the accumulated earnings tax and the personal holding company tax During a recent IRS audit, the revenue agent decided that the Parker family used their closely held corporation, Faico, to avoid shareholder tax by accumulating earnings beyond the reasonable needs of the business. Faico's taxable income was $890.000, it pald 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 Falco's accumulated earnings tax ansuming that it had accumulated $5 miltion after-tax income in prior years. Assume that for these years at issue, a corporation is exempt up to $250,000 of accumuiated earnings without demonstrating a reasonable business need for the accumulation. b. Compute Falco's accumulated earnings tax assuming that it had accumulated $129.000 after.tax income in pnor years. Assume that. for these years at issue, a corporation is exempt up to $250,000 of accumulated earnings without demonstating a reosonable business need for the accumulation. Complete this question by entering your answers in the tabs below. Compute Falco's accumulated earnings tax assuming that it had accumulated 55 million afteritax income in prior years. (Enter your ancwer in doliars and not in millions of dellars.)