<span style='color:brown'>Scott, I assume your employees are all honorable people who will do whatever you ask and not abuse the system. If that is not the case, then put them down as contract labor and let them file their own Schedule C's. You are on the hook only for the amount of work they perform, that way, and you can arrange the fee split so it covers their expenses.....they can write off all actual expenses including mileage.......and 100% of your payment to them is an expense to you.
However, if you want to maximize the cost attribution to your organization and minimize the after tax dollars then I would strongly suggest you provide vehicles as well as gas and expenses. Confer with your accountant AND an attorney that specializes in income tax litigation. Your vehicles can be leased for a really nominal sum as a fleet, your employees will always drive a modern, attractive car, and the entire payment for the vehicle, the insurance, and the gas and maintainence will be paid out of pre-tax dollars. Further, as employees it is not their job to provide equipment (one of the"duck" tests from the IRS is "Does the employer supply necessary equipment."), normally, including cars, computers, cell phones, desk space, etc.
You might get your attorney to recommend a trust attorney. You can have a trust own a leasing company that purchases and leases to you all such equipment. That trust can post profits which are reinvested and are not taxed until distribution of proceeds. In fact, your basic office can be set up so it generates very little in the way of profits. All possible profits generated being absorbed by trust ownership and such expenses as those incurred by the trust.
Your own vehicle and equipment can be handled in that manner as well, allowing you to receive a "pocket change" salary. You can be driving an Escalade, live in Trump Towers, have a yacht, a Malibu beach house, and still get earned income tax credit. It is all in how you structure the company, the trusts, and your relationship with your tax attorney.
If you don't want to go that far, I would pay more than the car allowance offered by the IRS. Any job that I bill by the hour includes a provision for car allowance. I charge the client, typically, $120 per hour (with a retainer) and $.40 per mile plus incidental expenses. I record all mileage and stops for a day. Any copies are charged at the copy center billed price, including printing costs of any interim reports and the final report. In forensic appraising such "reasonable costs" are expected. The mileage and per deum charged the client should be paid to the people who incurred the expense.....your employees.....and I would require they drive a respectable vehicle.</span>
