What type of INS Visa did she enter the US on? Did you both meet her BEFORE the adoption was final? If so, she should be eligable for a passport under the Adopted Child Citizenship Act of 2000
http://www.travel.state.gov/childcitfaq.html
"FACT SHEET
Child Citizenship Act Of 2000
Purpose
On February 27, 2001, the Child Citizenship Act of 2000 becomes effective. The aim of this law, which, among other things, amends Section 320 of the Immigration and Nationality Act (INA), is to facilitate the automatic acquisition of U.S. citizenship for both biological and adopted children of U.S. citizens who are born abroad and who do not acquire U.S. citizenship at birth. We are pleased to note that, because of this law, U.S. citizenship will be conferred automatically upon thousands of children currently in the United States.
Requirements
The following are the Act's requirements:
At least one parent of the child is a U.S. citizen, either by birth or naturalization.
The child is under the age of 18.
The child must be residing in the United States in the legal and physical custody of the U.S. citizen parent after having been lawfully admitted into this country as an immigrant for lawful permanent residence.
If the child has been adopted, the adoption must be final."
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see also
http://www.childadopt.com/citizen.htm
If your child meets the requirements of the Act, just print out a copy and show it to the moron at the post office who said that your kid needed to be naturaized before a passport can be issued. Under the Act, qualified adopted kids of US Citizens are automatically citizens. You will need to take certain documents along as well, to get the passport.
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"Q: Does the Act apply to foreign-born children who have immigrated to the United States in order to be adopted as well as to those who have been adopted abroad?
A: Yes. Children who have immigrated to the United States in order to be adopted become citizens as soon as the adoption decree is final.
Q: Does it matter in which order the requirements are met?
A: No. The order does not matter. Citizenship is acquired automatically as soon as all of the requirements have been met.
Q: Will a child who has met the requirements of this new law need to apply for a passport from the State Department or a Certificate of Citizenship from the Immigration and Naturalization Service (INS) in order to become a citizen?
A: No. As soon as the law's requirements have been met, the child acquires U.S. citizenship automatically without the need to apply for either a passport or a Certificate of Citizenship.
Q: What documents are required to obtain a passport for a child who became a U.S. citizen under the Act?
A: (1) Evidence of the child's relationship to a U.S. citizen parent (a certified copy of the foreign birth certificate for children born to an American or, if adopted, a certified copy of the final adoption decree); (2) the child's foreign passport with INS's I-551 stamp or the child's resident alien card; and (3) the parent's valid identification.
Q: How does someone prove admission into the United States as an immigrant for lawful permanent residence?
A: Either the child's permanent resident alien card, commonly known as a "green card," or an I-551 stamp placed in the child's passport by INS.
Q: How does a child demonstrate adoption in order to obtain a passport and/ or Certificate of Citizenship?
A: By presenting a certified copy of a final adoption decree."
Good luck.