Sawasky v. Internal Revenue Service, 8:14-cv-04673

Plaintiff Patricia M. Sawasky sued the IRS and an unidentified Ms. Gill seeking recovery of an alleged $346 tax overpayment.
Plaintiff filed an Application to Proceed in District Court without Prepaying Fees or Costs (in forma pauperis), reporting $804 monthly gross income, $700 net, ~$3,000 in checking/savings, and $20,000 in “inheritance saving.”
Plaintiff listed monthly expenses including utilities, insurance, auto loan, and credit card payments; she reported no dependents.
The magistrate judge reviewed whether Plaintiff’s financial circumstances justify waiver of the $400 filing fee (including $50 administrative fee).
The magistrate judge concluded that payment of the filing fee would not render Plaintiff destitute, impose undue hardship, or effectively block access to the courts, and therefore recommended denial of indigent status.
If the district judge adopts the recommendation, Plaintiff would have 14 days to pay the required filing fee; the magistrate noted the $346 recovery sought is less than the $400 filing cost.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Sawasky should be permitted to proceed in forma pauperis under 28 U.S.C. § 1915	Sawasky contends her reported income and expenses warrant waiver of the filing fee	Implicitly, the defendants oppose fee waiver by relying on the court to apply indigence standards (court evaluates financials)	Court recommended denial of in forma pauperis status because Plaintiff’s assets and income do not show destitution or undue hardship
Whether magistrate judge may issue a denial order or must submit recommendation	Sawasky did not directly argue this point in the record	N/A; court recognizes circuit split on magistrate authority	Magistrate issued a report and recommendation to preserve de novo review by district judge, citing differing circuit authority

Dillard v. Liberty Loan Corp., 626 F.2d 363 (4th Cir.) (grant/denial of in forma pauperis left to district court discretion)
Woods v. Dahlberg, 894 F.2d 187 (6th Cir. 1990) (magistrate cannot enter denial of in forma pauperis as it functions like involuntary dismissal)
Lister v. Dep’t of the Treasury, 408 F.3d 1309 (10th Cir. 2005) (similar limits on magistrate authority over IFP denials)
Donaldson v. Ducote, 373 F.3d 622 (5th Cir. 2004) (same principle regarding magistrate power)
Adkins v. E.I. Du Pont de Nemours & Co., 335 U.S. 331 (1948) (indigence for IFP need not be total destitution)
Brewster v. North Am. Van Lines, Inc., 461 F.2d 649 (7th Cir. 1972) (IFP privilege reserved for truly impoverished litigants)
Carter v. Telectron, Inc., 452 F. Supp. 939 (S.D. Tex. 1976) (articulated three tests for IFP: impecunity, undue hardship, last-dollar destitution)
Ali v. Cuyler, 547 F. Supp. 129 (E.D. Pa. 1982) (savings may justify paying filing fee without foregoing basic needs)
Diamond v. Colonial Life & Acc. Ins. Co., 416 F.3d 310 (4th Cir. 2005) (district court need not conduct de novo review absent timely objections to R&R)
Thomas v. Arn, 474 U.S. 140 (1985) (failure to file timely objections waives appellate review of magistrate R&R)
Wright v. Collins, 766 F.2d 841 (4th Cir. 1985) (procedural waiver principles related to R&Rs)
United States v. Schronce, 727 F.2d 91 (4th Cir. 1984) (same)