REF Generated for H1B renewal case where visa is valid but I-94 has Expired


My wife is working on h1b since last 3 years. The first I-94 which came with I-797 has the validity date till Jan 2013… She went to india DEC 2011 and when she came back in the same month, @port of entry, the officer gave new I-94 till July 16, 2012 matching the passport expiry date. Her employer never asked for updated I-94 and they applied for her second term extension on August 2, 2012, Now USCIS has generated an RFE asking for the possible extraordinary cicumstances for the 17 days of the gap she was out of status. Her employer could not catch or did not pay attention towards expiring I-94 when we submitted documents in early July 2012. What can be done to correct the situation without going back to home country to get approval for extention of status along with H1-B approval?

I would really appreciate a prompt response as we don’t have much time left to respond to the RFE.