Can you borrow from your trust fund for your own benefit?

[nineinchal]

Dad grants son $10 million in trust fund. Son is a sick gambler.

Son loses $28 M in stock market, fulltilt and Bellagio.

Father funds another $20 M to the trust. Son squanders more $$$, but withdraws these amount as loans with a promissory demand note due back to dad.

Wouldn't these withrawals be construed as income by the IRS?
This has been going on for thirty years. Son never paid back a dollar, even though there are demand notes for all these "loans." Interest income/expense has not been recognized on any tax return, either for the 1040 or 1041.

Any attorneys, CPA with an opinion?

No this isn't me, I should be so lucky.

Nineinchal CPA