A: Your penalties may be dischargeable in a Chapter 13 bankruptcy depending on how old they are, whether you filed the returns on time and whether a tax lien was recorded. Other factors need to be considered (e.g. your income, assets, other debt, etc.) Check with an experienced bankruptcy lawyer as more facts are needed.
A: Check ownership of the Colorado property with the county assessor. If it was held as tenants in common, his share passes to your brother's estate and whatever arrangements he made. If it is held as joint tenants with right of survivorship, his interest expired upon his death and the remaining tenants own all of it. In the latter case, you should record a certified copy of his death certificate. You will need to check with his county of residence when he died to see if there was a probate estate opened.
A: There many ways to do this including a trust. The simplest and cheapest way is to have them execute and record a beneficiary deed to their heirs. The heirs would have no present interest in the property, but upon the death of the last one, the home would pass to the heirs by operation of law and without any probate proceeding. Of course, probate may be necessary for other reasons. If they do nothing, the property will pass through the intestacy laws and will require filing a probate case.