Allen Ludden and Betty White Ludden v. Commissioner of Internal Revenue

CHOY, Circuit Judge:

The Luddens’ corporation established IRS-approved pension and profit-sharing plans for the benefit of its employees. Due to an inadvertent operational error by an accountant, the corporation made contributions to the plans on behalf of Mr. and Mrs. Ludden in fiscal 1972, but not on behalf of the only other eligible employee, secretary Whitehead! Therefore, the Commissioner determined that the plans failed in 1972 to qualify under I.R.C. § 401(a), 1 and asserted a deficiency against the Luddens for income tax on the contributions made in their behalf in that year. I.R.C. §§…