I suspect this is the case because EDIG, IMO, is responsible for paying the tax on the entire settlement amount (EDIG is the plaintiff) and then paying DM.

Am I missing something here? Any thoughts?

Jeff

you do not pay income tax on the gross, the $1.6 is gross Edig will deduct all costs of revenue plus all operating and admin expenses then you pay tax based on their net income if any thing is left . Unless you was referring to the foreign taxes.

sure if they get the expenses first then their cut will definetely be greater than 40% if you consider their reimbused expenses is part of their fee.