Policy Memorandum: Procedures for Recommending Revocation of a U.S. Passport to the Department of State; Adjudicators Field Manual, Chapter 83 (AFM Update AD 10-46) [open pdf - 272KB]
"In recent months, USCIS [U.S. Citizenship and Immigration Services] employees have on occasion informed customers that their U.S. Passports were invalid and should be surrendered to DOS. Upon review of certain cases, DOS determined that the passports were, in fact, valid and recognized in accordance with DOS policies and statutes. DOS has requested that USCIS direct any concerns regarding the validity of passports to DOS and not to the bearer of the passport. [...] USCIS lacks the authority to revoke or confiscate a U.S. Passport. If reasons to doubt the validity of a passport come to the attention of USCIS, USCIS will not seize the passport, instruct the bearer to return the passport to DOS, or otherwise notify the bearer that there may be issues with the passport. Instead, USCIS will follow the procedures outlined below to request revocation of a U.S. Passport whenever USCIS encounters an individual who is in possession of a U.S. Passport that USCIS has reason to believe: (1) was issued in error; or (2) the individual is no longer eligible to possess."
Policy Memorandum: PM-602-0036