If you happen to hear "Ihr" while the recorder says "Er", It is an natural issue of different local accents -the same way it happens- in different states in The USA; there is some inflection (the modulation of intonation or pitch in the voice) when it comes to articulation of some particular words that sound alike or have some kind of resemblance.
I entered "he's drinking water" and got this right, but I'm a little fuzzy now. I'm wondering if there's a way in German to differentiate between "he's drinking water" (non-specific source) and "he's drinking THE water" (which may refer to a specific, previously mentioned source) — does this sentence accomplish both tasks and it's simply context that informs the subtle shift in meaning? Maybe I'm getting ahead of myself but it'd b interesting to know.
1st learn to hear the difference between the two. Ihr sounds like ear, and er sounds like air (at least to me anyway). 2nd. Look at the word that comes after it. In this case, er trinkt and ihr trinkt are both correct, but for other words, the verb can be conjugated differently (eg er hat, ihr habt; er ist, ihr seid)