The IRS is auditing Crane Corporation, a manufacturer of widgets, to determine whether the company is liable for the accumulated earnings tax in a prior tax year. Crane is owned by 20 shareholders who are unrelated and was not a personal holding company in the year in question. Crane reported the following results for the current year:
Taxable income...................................................$ 150,000
Federal income taxes...............................................41,750
Dividends-received deduction3..............................85,000
Dividend paid on June 1...........................................20,000
The accumulated E&P balance on January 1 is $180,000, and the company can justify the retention of the $180,000 of E&P at the beginning of the year plus $80,000 of earnings earned in the current year in terms of meeting its reasonable business needs. In fact, all of the January 1 earnings were retained for the reasonable needs of the business.

a. What is Crane’s accumulated taxable income?
b. What is Crane’s accumulated earnings tax liability?
c. If Crane potentially owes the accumulated earnings tax, what steps can it take to reduce or eliminate the liability?