-snip-
It is of course impossible to prove the non-existence of anything. I can't
prove that dragons aren't real, and I can't
prove that I lost the only copy of all my private keys and seed phrases in a tragic boating accident. No reasonable court would say "Prove you have forgotten the password" or "Prove you don't have the seed phrase backed up somewhere", because it is impossible to do so.
In the US, loss of property (which is what bitcoin is classed as) can only be deducted from your taxes when it is caused by a federally declared disaster. So forgetting your wallet password or failure of your hard drive absolutely would not count. Now, the US doesn't have a wealth tax (at least, not yet!), but for the sake of capital gains taxes, losing your bitcoin wallet means nothing for the taxes you owe. It would seem particularly cruel to continually charge someone a wealth tax on money they can't access however, perhaps without which they would be well below the threshold and making them pay out from their regular income.
I did also find this document from the OECD:
The possibility of losses or theft of a virtual currency gives rise to a number of questions from a tax perspective. Should a loss or theft be treated as a disposal (and capital loss) for the taxpayer? Are lost tokens able to be deducted from the value of an inheritance? There is very little guidance available on how these events should be treated for tax purposes and approaches differ in the few countries providing guidance. For example, in the case of loss or theft of a crypto-asset in Australia, the owner may claim a capital loss, provided they are able to present the evidence of their ownership. In the United Kingdom, theft is not considered to be a disposal and Her Majesty’s Revenue and Customs (HMRC) considers that the individual continues to own the asset. Similarly, the loss of a private key is not considered a disposal, but a taxpayer can apply to have the loss recognised.