I would advise filing both the 2008 and 2011 returns before applying for citizenship, so the tax issues will be cleaned up from the beginning of the N-400 process, in order to reduce the chances of the interview going into a hostile line of questioning or post-interview processing getting bogged down with the tax issues (with the interviewer wanting more documents etc.).
Otherwise, if the 2008 return is still unfiled when he files the N-400, I don't know if that can be construed as failing to file "since becoming a permanent resident", because although the income was in 2008, it's still in unfiled status when he's a permanent resident. And if he still owes tax for 2008, he won't be able to answer NO to the question about having overdue taxes.
The ITIN vs. SSN is a tax question, not an immigration question. I hope he has a tax professional (not H&R Block!) helping to prepare the 2008 return, due to the possible penalties and complexities of filing it so late, and the possibility of dual-country tax liabilities in 2008 that may have to be deducted against each other using tax treaties and other rules.
Last edited by Jackolantern; 8th September 2012 at 10:18 AM.
PD: Jan 2003 (EB3 rest of world)
I-485 Approved: July 2007
I am a layman, not a lawyer. What I write here is not official or professional legal advice. In addition, my answers on this forum are specific to the scenarios discussed in each thread and should not be generalized to other situations.