Amends the Internal Revenue Code and Title II (Old Age, Survivors and Disability Insurance) of the Social Security Act to exempt individuals engaged in the harvesting of timber, or in the transportation of timber to market, from employment and Federal unemployment taxes and withholding of tax, if such individuals perform such services under conditions which: (1) require them to furnish the equipment necessary for their work; (2) require no set hours or days for the performance of such service; and (3) provide for remuneration based solely on the extent of such individuals' production. Requires individuals who pay timber harvesters for services performed during the taxable year to furnish the Internal Revenue Service with information respecting the identity of the individuals paid and the amount of remuneration paid. Requires individuals reporting such information to the IRS to furnish to the timber harvesters a written statement showing the name and address of the individual making the informational return and the total amount of payments made to the individual shown on the return. Provides penalties for failure to comply with such reporting requirements.