Schedule E with 4 rentals --What a predicament!!!

[KumarB]

Client whom I know very well referred his father who has 4 rental properties.

Situation:
1. Purchased properties and placed in service in 1986,1989, 2001 and 2006 respectively.
2. Reviewed last 7 years tax returns(can only locate from 2007 on )- no depreciation reported on sch E from 2007, excessive deductions for R & M, and supplies
(ranged from $2000.00 - 6500.00 for each property from 2007 - 2013)
3. He does not have proof to substantiate expenses claimed.

Thinking of doing the following:
1. Use form 3115 to catch up deprecation on the 2006 property as a 481 adjustment. Leave the other properties as is because I don't know if depreciation was ever claimed going back to 1986,1989 and 2001.??
2. Use the form 3115 for audit protection using DCN 184 to comply with rules going forward.??
Also, by following the new TPR, would such a drastic reduction in expenses for R&M, and supplies raise a red flag if taxpayer haven't been red flag already.

Any advise????
Oh, the headache of having a new tax practice with clients being referred with such a situation.....

[ATSMAN]

Who was preparing the returns from 2007 on? How did they figure out the expenses? Did they pick a $ from the air?
Use 3115 to fix the depreciation mess and going forward go with the safe harbor elections and hope for the best. I would not mess with the prior years too much on other issues, it may be a can of worms you don't want to open up given the fact that documentation is lacking!

[KumarB]

CPA signed returns so i'm assuming he prepared taxes. Client says he will summarize how much was spent on R&M and Supplies for each property but the accountant never ask for actual receipts. He never distinguish a repair from a home improvement. What a shame!!!
Thank you for your input