Modernizing the Grant Process: Verify First, Fund Fast

TLDR: Grant and incentive programs are often bogged down by the manual verification of tax returns. This slows down the distribution of funds to the small businesses that need them. Direct IRS integration allows administrators to transition from parsing manual PDFs to ingesting clean, structured data, eliminating fraud and accelerating deployment.

Key Highlights:

• Eliminate Friction: Removes the need for manual document collection and the interpretation of complex tax forms.
• Operational Velocity: Saves an estimated 4–8 hours per application by bypassing manual review.
• Accuracy: Reduces manual review errors by up to 90% while providing a consistent audit trail.
• Fraud Mitigation: Mitigates fraud exposure by verifying financial history directly against the IRS data.

A new small business grant program launches with high hopes, whether initiated by a state economic development agency, a Community Development Financial Institution (CDFI), or a private corporate foundation. The goal is simple: deploy capital to businesses that meet specific criteria.

Applications flood in. But within days, the deployment team hits a wall. They aren't limited by capital; they are limited by paper. Thousands of PDF tax returns sit in a queue, waiting to be opened, interpreted, and checked for accuracy to determine if they meet the grant criteria.

Moving Beyond Document Collection

For decades, "verifying eligibility" has been synonymous with "collecting documents." Administrators ask business owners to upload their most recent tax returns to demonstrate their qualification.

This approach is fundamentally flawed. It forces your team to act as data entry clerks, parsing unstructured PDFs and manually interpreting complex tax forms.

Direct IRS integration changes the architecture and speed of decision-making of these programs. It allows you to transition from parsing manual PDFs to ingesting clean, structured data directly into your existing workflows or databases.

Our API Integration with the IRS powers this transition. We automate the submission and retrieval of the Form 8821, clearing the path for you to pull standardized financial history without administrative delays. Read more about our automated Form 8821 workflow in our previous blog, End the Wait.

By integrating this workflow, grant administrators can:

• Automate Income Checks: Instantly verify if an applicant falls within the required revenue bands using verified tax data.
• Confirm Status: Verify that a non-profit applicant is truly active by pulling their most recent tax status and delinquencies using Form 941 and private Account Transcripts.
• Validate Operations: Ensure the business has active payroll (Form 941) and isn't just a shell entity.

Operational Efficiency and Audit Readiness

In the private sector, fintechs have already learned that velocity is critical. As we discussed in The New Standard for Modern Lending, you should not have to choose between moving fast and verifying deeply.

The same logic applies to government and incentive programs.
When verification is built on structured data, the operational impact is massive. Administrators save an estimated 4–8 hours per application by removing the manual review cycle. Furthermore, relying on direct API feeds rather than human interpretation reduces review errors by up to 90%.

Crucially, this approach provides a consistent audit trail. Every verification is backed by an official transcript with structured data, ready to be plugged into any decisioning engine, directly pulled from the IRS master file. This significantly mitigates fraud exposure and ensures that funds are directed to legitimate businesses.

Final Thoughts

Public and private incentive programs should be defined by their impact, not their administrative backlog. Contact us to learn how direct IRS data can help you verify eligibility instantly and deploy funds with confidence.