I would like to know if reimbursing an independent contractor for
travel expenses incurred in the course of their business are
considered reportable payments on Form 1099. The independent contract
submitted an expense report for his airfare, which our firm is
reimbursing him for, however we do not know whether we should provide
him with a 1099 due to this reimbursement. Please advise if reimbursed
travel expenses to an independent contractor are reportable on Form
1099-MISC box 7.

Hi jasonaccountant,

Given that the contractor submitted an expense report, the travel
expenses should not be reported on 1099-MISC. If he hadn't accounted
for the expenses, then you would've reported the amount as income on
the 1099.

IRS: Instructions for Form 1099-MISC 
Examples. The following are some examples of payments to be reported in box 7.
"A fee paid to a nonemployee, including an independent contractor, or
travel reimbursement for which the nonemployee did not account to the
payer, if the fee and reimbursement total at least $600."
http://www.irs.gov/instructions/i1099msc/ar02.html

If you make the payment under an accountable plan, deduct it in the
category of the expense paid. For example, if you pay an employee for
travel expenses incurred on your behalf, deduct this payment as a
travel expense. If you make the payment under a nonaccountable plan,
deduct it as wages."
http://www.irs.gov/publications/p535/ch02.html 

Rules for Independent Contractors and Clients
"This section provides rules for independent contractors who incur
expenses on behalf of a client or customer. The rules cover the
reporting and substantiation of certain expenses discussed in this
publication, and they affect both independent contractors and their
clients or customers."
Accounting to Your Client
If you received a reimbursement or an allowance for travel,
entertainment, or gift expenses that you incurred on behalf of a
client, you should provide an adequate accounting of these expenses to
your client. If you do not account to your client for these expenses,
you must include any reimbursements or allowances in income. You must
keep adequate records of these expenses whether or not you account to
your client for these expenses."
http://www.irs.gov/publications/p463/ch06.html#d0e7532

Here is a good example:

Tax Reporting Requirements and Methods of Payment
"The University is required to report honorarium payments equal to or
greater than $600 on Form 1099-MISC; therefore, a Social Security
number from the recipient is required. The entire amount of the
honorarium and related travel expenses will be reported on the
recipient's Form 1099-MISC unless the recipient chooses to document
travel expenses separately and provide appropriate receipts within 60
days after the expenses were paid or incurred."
To accommodate appropriate Form 1099-MISC reporting, departments may
use one of the two methods to document the honorarium payment.
    * Lump sum payment: Indicate the total amount of the honorarium
including any travel expenses incurred by the recipient. This full
amount will be reported as taxable income on Form 1099-MISC.
    * Split payment: Indicate the honorarium amount separately from
the documented travel expenses. Only the honorarium amount will be
reported as taxable income on Form 1099-MISC."
 http://www.obfs.uillinois.edu/manual/central_p/sec17-3.html 

I hope this helps. If you have any questions, please post a
clarification request and wait for me to respond before closing/rating
my answer.

Thank you,
hummer

Search Strategy:
I searched the IRS website for independent contractors 1099 travel expenses

Thank you so much for the great response.  The University example was
really helpful and the links to your research are invaluable.

Dear jasonaccountant,

You are welcome, I'm glad to hear all is well. Yes, I like the
University example too, it really makes things quite clear in a few
sentences.

Thank you for such a nice note, it's very nice of you.
Sincerely,
hummer