The IRS will normally let the lien sit there and wait for the property to be sold then take its 1/2 share. The IRS only forecloses on a lien on a home as a last resort especially if the property is underwater. The IRS has a secret lien as soon as the taxes are assessed. So if you transfer the property now the IRS would have a good case to claim it was a fraudulent transfer but he could sell it to you, but why would you buy a property that is underwater? So although it is not a problem for you now it could be a problem in the future. Consult a tax attorney.
Disclaimer of California Attorney. Laws differ from state to state. Although the above response is believed to be accurate, it should not be relied upon as any type of legal advice because the information provided is incomplete. It is intended to educate the reader and a more definite answer should be based on a consultation with a lawyer. No attorney client relation is formed with me without a written contract. Good Luck starts with a strategy and a plan. Robert J. Suhajda, MS,CPA Attorney-At-Law 17721 Norwalk Blvd. #43 Artesia, CA 90701 562-924-8922 Tax Relief Lawyer. Former financial auditor and controller. Admitted to US Tax Court, Income Tax, IRS representation, Fiduciary income tax returns, Estate and Gift tax returns, Homeowner Association Strategist.
I would concur with my colleague's answer above. I would only add that it's not just the IRS you need to worry about. Your brother's interest in your home is subject to the claims of all his creditors, not just the IRS.
Oh, and if your brother is also a debtor on the mortgage, bear in mind that he probably cannot transfer his interest without the lender's consent.