It's been a few years, since the IRS and the State Dept combined forces to prevent passport holders from renewing their passport if they owed more than $50,000 in back taxes. What is clearer now is how the program is actually being enforced.
In most situations, the State Department is NOT "confiscating" passports. They are however, preventing people from renewing passports (and we can assume getting a passport, period). They are also preventing children from getting passports if a parent owes back taxes north of the $50k marker.
What is clearing passports for renewal is an agreement to pay the back the taxes or the submission of an Offer in Compromise. Passport renewal blocks sometimes happen at the most inconvenient times like when you are going on an important trip, for example. WATAX staff have had to work very fast on these cases, but we have done so with success, so far!
If you are an American expat or a US citizen that wants to travel and avoid potential passport problems, it would be prudent to file your last six years of returns. If you are a US Expat you should utilize the Foreign Earned Income Exclusion or Foreign Tax Credit and file the necessary FBARS to bring yourself into full tax compliance. If you are not an Expat, file the 1040s with the normal protocol.