We have an independent contractors and we pay all expenses when they go out of town to do some work for us like hotel, local transportation, rental car, airfare and per diem. Is the per diem taxable, they are not employees and we do not get any receipts in return from them? Is it also correct that contractor fee and per diem are 1099 reportable? Where can I find this in the IRS website?

If you pay them a set amount with no expense report, then you are using a NON-accountable plan. In that case, the per diem is taxable compensation to the contractor.

If you are paying the expenses direct, i.e. you pay the hotel, or if you require receipts and an expense report, then the plan is accountable and the per diem is considered non-taxable reimbursement for expenses incurred.