Mr. Vernon is the sole shareholder of Teva. He also owns the office building that serves as corporate headquarters. Last year, Teva paid $180,000 annual rent to Mr. Vernon for use of the building. Teva's marginal tax rate was 21 percent, and Mr. Vernon's marginal tax rate was 37 percent. The revenue agent who audited Teva's return concluded that the fair rental value of the office building was $125,000.

a. Calculate any increase or decrease in Mr. Vernon's tax as a result of the agent's conclusion.

b. Calculate any increase or decrease in Teva's tax as a result of the agent's conclusion.