we cannot see the trust documents because irrevocable means nothing until certain events happen. Under the tax code this could be a grantor trust.
As a general matter, a “grantor trust” is a trust in which the grantor or other owner retains a sufficient level of power to control or direct the trust’s income or assets. If a grantor retains certain statutorily described powers over (or benefits in) a trust, the income of the trust is taxed to the grantor.
An “irrevocable trust,” however, may or may not qualify as a grantor trust. An irrevocable trust may be treated as a grantor trust if one or more of the grantor trust conditions set out in §§ 671 – 678 are met.
Under those rules, a grantor trust is any trust in which the grantor retains one or more of the following powers:
A reversionary interest of more than 5% of the trust property or income.
The power to revoke the trust and/or to return the trust’s corpus/principle to the grantor.
The power to distribute income to the grantor.
Power over the beneficial interests in the trust - the power to change beneficiaries
Administrative powers over the trust allowing the grantor to benefit.
A trustee, beneficiary, or other person a power exercisable solely by himself to vest the corpus or the income therefrom in himself.
if no trust returns have ever been filed or have been filed with this or a similarly worded statement on the 1041 page 1 its a grantor trust.
"Under the terms of the trust instrument, this is a grantor trust. All income
is taxable to the grantor as set forth under sections 671-678 I.R.C.
A statement of income, deductions, and credits is attached."
