Once she became a US permanent resident, she continues to meet the Green Card Test (and thus be a resident alien for US tax purposes) until either she becomes a citizen, she voluntarily signs a form to relinquish her permanent residency, or it is taken away from her by an immigration judge, or an official determination is made that she has abandoned her residence. Absent one of these, she continues to be a resident alien forever even if she has been gone so long that she would not likely be allowed entry if she tried to enter as a permanent resident, and even if her physical green card is expired.
See Green Card Test in Publication 519:
You continue to have resident status under this test unless the status
is taken away from you or is administratively or judicially determined
to have been abandoned.
Resident status taken away.
Resident status is considered to have been taken away from you if the
U.S. government issues you a final administrative or judicial order of
exclusion or deportation. A final judicial order is an order that you
may no longer appeal to a higher court of competent jurisdiction.
Resident status abandoned.
An administrative or judicial determination of abandonment of resident
status may be initiated by you, the USCIS, or a U.S. consular officer.
If you initiate the determination, your resident status is considered
to be abandoned when you file either of the following with the USCIS
or U.S. consular officer.
You must file the letter by certified mail, return receipt requested.
You must keep a copy of the letter and proof that it was mailed and
received.
CAUTION
Until you have proof your letter was received, you remain a resident
alien for tax purposes even if the USCIS would not recognize the
validity of your green card because it is more than ten years old or
because you have been absent from the United States for a period of
time.
If the USCIS or U.S. consular officer initiates this determination,
your resident status will be considered to be abandoned when the final
administrative order of abandonment is issued. If you are granted an
appeal to a federal court of competent jurisdiction, a final judicial
order is required.
Assuming she did not submit Form I-407 to voluntarily relinquish permanent residency, and assuming she was not removed from the US by an immigration judge, she is still a resident alien for US tax purposes, and have been all these years. As a resident alien, her worldwide income needs to be reported for US taxes no matter where she lived. Although she would be able to use the Foreign Earned Income Exclusion, she would still have needed to report that income on her US tax return and then file Form 2555 to use the exclusion on her foreign earned income.
Regardless of whether she was a resident alien or non-resident alien according to the tests, they would have been able to file Married Filing Jointly anyway, because one spouse was a US citizen or resident alien, so they could always use the Nonresident Spouse Treated as Resident option to file jointly if it happens that the other spouse was a nonresident alien (which it appears she wasn't).
