Unfortunately, it appears that your wife will be subject to the ten year bar because she accrued more than one year of unlawful presence when she overstayed her authorized period of stay. Generally, being a United States citizen does not forgive your wifes overstay of her visa.
According to Immigration and Nationality Act (INA) section 212(a)(9)(B)(i) any alien (other than an alien lawfully admitted for permanent residence) who: (I) was unlawfully present in the United States for a period of more than 180 days but less than 1 year, voluntarily departed the United States (whether or not pursuant to section 244(e) prior to the commencement of proceedings under section 235(b)(1) or section 240, and again seeks admission within 3 years of the date of such alien's departure or removal, or (II) has been unlawfully present in the United States for one year or more, and who again seeks admission within 10 years of the date of such alien's departure or removal from the United States, is inadmissible.
According to INA section 212(a)(9)(B)(ii), a person accrues unlawful presence when the alien is present in the United States and his or her period of authorized stay has expired.
It appears that your wife will be subject to the 10 year bar. This means she cannot be inspected and admitted into the United States (by air, sea, automobile, or any other means) for ten years.
There are a limited number of exceptions and a waiver under INA section 212(a)(9)(B) that may be available to you and your wife. Using the facts provided, for the waiver to succeed, you must prove that as a United States citizen, you would suffer extreme hardship if your spouse were refused admission to the United States.
If you succeed with the extreme hardship waiver, you could then proceed with all of the necessary steps for obtaining a K-3 nonimmigrant visa for your spouse.
Proving extreme hardship in this type of case can be very difficult because it is a very high standard of proof that must be met. You should consult with an experienced immigration attorney to evaluate your documents and to see if you fall under one of the limited exceptions and/or if you should file the hardship waiver.
Evan Shane and Michael Shane, Attorneys at Law
Law Offices of Michael Shane, P.A.
9100 South Dadeland Blvd, PH-2, Suite 1810
Miami, Florida 33156
(305) 671-8777
www.shanelaw.com
-- Michael Shane
