Ok, I think I found my answer while reading through the rules today!
Burn does DIRECT damage.
Here is the definition of DIRECT damage from the book on page 30:
DIRECT Damage
Some effects cause direct damage. This damage
is placed directly on the target creature. It is not an
attack, and cannot be prevented or avoided. Armor
and other traits, effects, and abilities cannot modify
or reduce direct damage.
Exception: If an object has Immunity to a damage
type, it is not affected by direct damage of that type.
Given that FLAME +/- is a trait or an effect, it does NOT modify or reduce!