If we understand your situation correctly:
Both you and your spouse are in deep trouble. You are jointly and equally liable for any errors or omissions on a joint return. You don't even have the luxury of claiming that your spouse filed behind your back, since you knew your self-employment income was not being reported.
You need to take yourself and your spouse to a tax specialist and prepare revised tax returns for all 7 years, to calculate the tax you should have paid and to estimate the penalties and interest. Then, the tax specialist can contact the IRS and offer a compromise to file corrected returns for all those years and pay a compromise amount of tax and penalties, which the IRS may accept because it is better for them for taxpayers to voluntarily comply than to have to investigate and sue.
Note that the statute of limitations (which is normally 3 years or 6 years depending on the amount of tax owed) never runs out in the case of deliberate fraud, which this seems to be.
