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That's a very interesting point. I need to investigate this further. I am a NRA and my wife is a dual citizen. I have been filing all the tax documents including FBAR and 3520s for the past number of years as if I am a U.S. citizen thinking that's what I needed to do to be compliant ...

That is correct. You must have foreign source income of the same category
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A Cdn non-US citizen living in Canada would not pay any tax on US bank interest, thus a US citizen living in Canada, since they cannot take credit in Canada for any US tax paid on that interst
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