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Hello and thank you for your question.
This may help him if he's living off social security because he'll have self-employment tax to pay which can increase his benefit...
Anyways, if that's the best he can do to reproduce records, then that's about all you can do for him. In more recent years he's probably still able to get bank statements and try to put together some records. With a total lack of records, the taxpayer generally loses their deductions, but like many your client can try to make use of the Cohen rule.
See Cohan vs. Commissioner, 39 F. 2d 540 (2d Cir. 1930).
"(5) Board of Tax Appeals is directed to find some basis of allowance of deduction for entertainment and traveling expenses, the evidence showing that considerable sums were spent although no records were kept. "The Board should make as close an approximation as it can, bearing heavily if it chooses upon the taxpayer whose inexactitude is of his own making.""
"The decision is modified as to the royalties of "Get Rich Quick Wallingford," and the cause is remanded to make some allowance for the expenses of travel and the like; otherwise it is affirmed."
Yes, if the client wants to file that way go ahead. He's basically got no records so what else can you do other than make a good faith estimate? I would include a statement with each return acknowledging the fact that these are estimated amounts. It's not something you want to try and cover up because some protection is afforded for stating what is being done.
I would also go over the benefits and drawbacks of filing with my client. Those observations would have to include an acknowledgement of the potential for tax evasion charges if he doesn't come clean, going over the interest and penalties that will be assessed, etc. It's up to the client and other than stating the facts and the risks there isn't much more you can do.