In New York, 300 people attended IRA Night at the Palace Wednesday. It was neither a political nor a charitable event, but rather a market set up by Merrill Lynch to give procrastinators a chance to beat the Friday deadline for Individual Retirement Account contributions.

Similar scenes are happening all over the country. Dean Witter, the brokerage house, has established an around-the-clock toll-free number to handle inquiries. A Memphis savings and loan makes house calls to deliver applications. Citibank plans to keep its mid-Manhattan office open until midnight tonight.

American Security Bank will make loans at 18 percent to cash-short customers so they can open accounts and get the tax deduction. (The interest on the loan is also deductible.)

The payoff is a huge volume of last-minute IRA business. Merrill Lynch Vice President Don Underwood said all his firm's branches opened 19,000 accounts on Wednesday. The Bank of America in San Francisco reported the number of new accounts in March doubled to 8,000 a day.

In the nation's capital, 12 people were waiting outside Washington Federal Savings and Loan in the 5100 block of Wisconsin Avenue NW for the doors to open yesterday. Some, who came equipped with lawn chairs and morning newspapers, waited as long as an hour.

"It was like they were there to buy tickets for a sporting event," said branch manager Douglas Clark. Inside the financial institutions, there are also lines, but bankers say the surge is nothing compared with the first days the All Savers certificate went on sale in 1981.

One of those standing in line yesterday at Washington Federal was David Seaver, a research analyst from Vienna. "I wait 'til the last minute to do everything," he explained. Shirley Klavan of Silver Spring was returning completed IRA applications for her brother and her son.

Rudy De Souza, a consulting engineer from Reston, studied an ad showing the S&L's terms as he waited with his wife and young daughter. A native of Goa in India, De Souza said he had been tracking rates since last fall.

The Internal Revenue Service reports that 17 percent, or 5.6 million, of the tax returns filed so far this year list IRA deductions. When all returns are tallied, the number of IRA deductions eventually may double the 3.1 million listed in 1981 before virtually all American workers became eligible.

The most optimistic original estimate of the amount of money expected to flow into IRAs during the first taxable year (of 15 months) was about $50 billion. Contributions may actually exceed even that figure.

At the end of 1982, IRA accounts at commercial and savings banks, S&Ls, mutual funds, credit unions and life insurance companies totaled about $58 billion, of which about $33 was contributed that year. February figures from the Federal Reserve show a 73 percent increase in outstanding IRA and Keogh balances over the previous year.

Last November the IRA Reporter predicted $10 billion in new funds during the first quarter of this year. However, that estimate may prove conservative given the surge of last-minute activity.

Merrill Lynch reports that most of the 19,000 accounts opened this week contained the maximum contribution: $2,000 for an individual, $2,250 for a spousal IRA, and $4,000 if both spouses work. So do banks and thrift institutions in the area. Some people are even making their 1983 contributions at the same time, a fact that makes estimates for the first year more complicated.

Among the investors questioned, all were hedging their bets against a rise in interest rates by splitting their funds between fixed- and variable-rate accounts.