Health Club Chain Disputes IRS Finding

A Carlsbad company that runs a chain of popular health clubs is disputing an Internal Revenue Service audit that found the business owes about $2.5 million in back taxes and penalties. International Fitness Consultants Inc., which owns 24 Hour Fitness clubs, claims in documents filed in U.S. Tax Court that the IRS erred in disallowing a number of legitimate business expenses during an audit of the company’s operations for 1992 and 1993. The IRS contends that the company owes back taxes of $1.5 million in 1992 and $550,000 in 1993, and also penalties totaling $415,000. The company operates 100 health clubs in five states--California, Colorado, Hawaii, Nevada and Texas. The clubs used to be known as Family Fitness Centers. IRS officials in Laguna Niguel said it will be at least a year before the case is heard.