Switching your depreciation on your own, by just using new lives or a study's numbers on next year's return, is an unauthorized method change, and the consequences run in both directions. IRC section 446(e) requires IRS consent before you change an established accounting method, and once you have depreciated a property the same way on 2 or more consecutive returns, Reg. 1.446-1(e)(2)(ii)(d) says that is your method, even if it was wrong from day one.
What the IRS can do
On examination, deductions taken under the unauthorized method can be disallowed and recomputed under your old method, with accuracy-related penalties of 20% under IRC section 6662 on any resulting underpayment. The IRS Cost Segregation Audit Techniques Guide specifically directs examiners to check whether a taxpayer applying a study to an existing property filed Form 3115 and computed a section 481(a) adjustment. There is also a positioning cost: once a year is under exam, the audit protection for prior-year treatment that a properly filed Form 3115 would have provided is gone.
The trap that catches non-filers: allowed or allowable
The same rule punishes the opposite move, quietly stopping depreciation without consent. Under IRC section 1016(a)(2), basis is reduced by the greater of depreciation allowed or allowable. Skip the deduction for years and your basis shrinks anyway; at sale you pay tax, including unrecaptured section 1250 gain at rates up to 25%, on depreciation you never benefited from.
Worked example
An investor who bought a $400,000 condo rental in 2019, with a $320,000 depreciable building, stopped claiming depreciation after 2022 on the theory that it would avoid recapture at sale. The allowable deduction was about $11,600 per year, so 2023 through 2025 added roughly $35,000 of basis reduction with zero deductions claimed. If the condo sells in 2026, the gain is computed as if all of it had been deducted. The correct repair, made while the property is still owned, is Form 3115 under the automatic procedures of Rev. Proc. 2015-13: the missed $35,000 comes back as a negative section 481(a) catch-up deduction, and basis and deductions line up again.
When no Form 3115 is needed
Two situations are genuinely exempt. If only one return has been filed since the property went into service, there is no established method; you amend that return. And mathematical or posting errors, as opposed to a consistent treatment, are corrected by amendment, not method change. Claiming bonus depreciation correctly in the original placed-in-service year under IRC section 168(k) also needs no 3115; that is adopting a method, not changing one.
Amadae prepares Form 3115 filings with the section 481(a) math whenever a client's depreciation needs to move, whether to adopt a cost segregation study on an existing property or to repair years of skipped or misclassified depreciation, and files the return that carries the change.