A simple trust is a trust that is required to distribute all of its income currently (each tax year), does not accumulate income, and does not distribute corpus. In any tax years where the foregoing is not the case, then the trust is treated as a complex trust.
The beneficiary of a simple trust includes in his/her gross income the amount of income required to be distributed to him/her whether actually distributed or not.
See Treas. Reg. § 1.652(a)-1
Since you have paid taxes on the income required to be distributed by the trust but the trust has been accumulating income, it could be the case that the language in the trust (and the intent therein) has not been followed precisely. However, since you apparently have the discretion to allocate corpus to yourself, that is probably a moot point since the trust, in any given year, can be treated as a complex trust (and note that complex trusts can also be trusts that require income to be distributed currently).
Regardless, if income that has already been taxed has accumulated in the trust, it becomes corpus which can then be distributed (if in accordance with the terms of the trust); no further taxes would be due but any gain or income generated thereafter on the accumulation would be subject to taxation.
An example would be where the income of $1,000 for a tax year that is required to be distributed is not distributed but left in the trust. The $1,000 is invested in a mutual fund which is sold two years later for $1,100. In that instance, the $100 represents long-term capital gain and, depending upon the language of the trust, is distributed and taxed at the beneficiary level or retained within the trust and taxed at the trust level. If, instead, the entire mutual fund is distributed, then $1,000 represents an in-kind distribution (corpus) and is not taxed.
Again, you might want to seek an in-person consultation with an trusts/estates professional so the language in the document can be reviewed thoroughly.
