"was told tax can be reported and paid at the trust level. Any truth to that?"

True, if there were no distributions to the grantor.  False, otherwise.

There is something called a "sprinkling trust, where the trustee is allowed to disperse funds according to the needs of the beneficiaries. Unlike many trusts where the trustee must follow strict instructions from the creator of the trust, sprinkling trusts allow almost unlimited flexibility for the trustee to give funds to the beneficiaries as needed."  But I doubt that's what you have.