@716mafia
Note that with an "accountable plan", you have to prove your mileage with adequate records, such as a diary listing the date, purpose, and mileage of each qualifying trip. They can pay you in advance, but must periodically reconcile your mileage diary to the reimbursements and make sure you aren't paid too much. (Any mileage paid without requiring proof is considered part of your taxable income, as in your current situation.) The employer is free to pay less than the IRS rate, if that is what they offer and you accept it, but they can't pay more.
If the employer is willing to keep track and check your records, then can reimburse you tax-free and they still get the deduction as a business expense. However, by not requiring proof from you (which simplifies their paperwork, I suppose), the reimbursement is considered part of your taxable wages.
