Theirs a foam stuff that you spray over the holes that doesn't let them come out again. its from raid i think and i do not know on how bad it is to the soil. ummmmmmmm call a beekeeper they may be able to give you some other methods.

There are hundreds of ways of dealing with these, none envromentally friendly. Sealing "the" entrance hole will do noting since they already have another means of egress and can easily make more as needed. Pouring gasoline on and lighting that does little since the nest is deep enough that the heat from the resulting fire won't reach it, and since it is illegal to dump petroleum products in that way could result in serious trouble for you.
The single best way of dealing with these buggers is to put some Sevin around the entrance holes in a way so that the returning wasps need to walk through it to gain entry and will haul the Sevin down into the nest where it will poison those down there, including the queen.
Now the good thing is that even if you do nothing this year they will not use the same nest next year.

There is a post about this in the organic forum. Good luck!

Neat organic solution to yellow jackets. Put a large clear glass mixing bowl over the hole. Wait until the bees have entered the ground nest for the night--dusk. Go to bed and the next morning watch--this works because it operates on the bees natural instinc tual patterns--as long as there is light, there is a way out. They will fly against the glass until they die--they will not dig out. Instinct tells them the nest is open. The best thing about this solution is you will be able to see for yourself within a few hours that it works. Do not remove the glass dome until you are sure everyone is exterminated--I wait a week. You also will see one or two bees who did not make it in before bedtime, but they disappear (die). We have taken care of a lot of nests on our 5 acres.

That's really interesting, I've never heard of that method before. I think I may have the same problem so I'll try this if I do.