Hi,
I am in really confusing situation and none can give me a good answer. Please help.
I am a resident alien with L-1 visa, and got married in September, 2010.
My wife is not US citizen as well, and she studies back home. She was in US on L-2 visa in October, 2010.
We did not apply for SSN that time(L-2 holders are eligible) and now she is back home, pregnant. She can't come to US, and I plan to leave USA in couple of months as well.

I want to file jointly now, but need either SSN or ITIN. Since she does not have a valid L-2 visa anymore she is not eligible for SSN. But, IRS require denial of letter from SSA office. What should we do now, please advice...

You will atttach W-7 (ITIN application) with your tax return. IRS does not require denial letter from SSA office to issue ITIN.

But, why it mentions it in the updated W-7 instructions. Have a look at the last paragraph of the "Purpose of Form" section.

The denial letter possibly makes the process go a bit faster, but the SSA is not consistent in issuing the denial letters. THAT is the reason it is NOT required.