Suppose a person who is a beneficiary of a trust holds assets generating $100,000 annual income in one irrevocable trust, and they are taxed by the IRS at about 37% of all income above about $12500. The marginal tax rate for income between $0 and $2500 is only 10%.

Suppose all beneficiaries and the trustee(s) agreed to the following:

What section of code or law would prevent this tax payer from splitting all of his assets into 40 separate trusts, each with income of only $2500 each, and obtaining the 10% tax rate for all of his income?