Many Americans living abroad are ignorant of the duty to still file federal taxes while residing abroad. It gets fairly complicated fast and mistakes can have huge ramifications for those that ever intend to move back. If you haven't filed you can go back and file them late. So long as you live in a country with a double taxation treaty with the US (most countries do, google it) and your local taxes are more than the fed wants you won't owe anything.

It gets worse if you work for yourself, i.e. I'm a freelancer, and so I get to pay social security and medicare no matter what. Also recent law changes have meant that you have to report any bank account with more than $10,000 in it. As to services of the embassy they charge for everything I've used them for, and it's not cheap, more annoying cause at least the Stockholm embassy won't take a US check or bill pay from Swedish internet banking, instead you have to get the equivalent of a cashiers check which is all but obsolete in Sweden.

I'm going to go dual citizenship this summer. I want to be able to vote in national elections and it will allow me to live and work anywhere in the EU, plus sometimes it's easier to travel on an EU passport. Sometimes I want to toss aside the US citizenship cause of the headache and expense of filing my taxes properly, but I wouldn't want to close the door on being able to return to the US easily either.

The whole tax citizens abroad is mostly based in a bygone era when rich people went abroad to avoid taxes. These days the world is a lot smaller and it's biting regular folk in the ass.