It's possible for a policy to result in an net positive even if it entails some individual negative examples.

it's a given for any policy, but we aren't talking about generalizations here; in the end, it's the particular that matters.

It depends on the alternative you are suggesting. No taxes? A bureaucracy so vast that can handle all imaginable edge cases? Individual discretion of the tax assessor? I think all these could fix this particular problem but might lead to worse outcomes overall.

i suggested the solution right there - forfeiture of the assets that the taxman can't get the tax for.

Ugh I must have been half asleep when writing the original comment (toddler woke up at 4am). I mistook your comment for a knee-jerk libertarian reaction, but what you propose does make a lot of sense. I stand corrected.