US President Donald Trump poses with ABC anchor George Stephanopoulos at the National Constitution Center in Philadelphia, Pennsylvania on Tuesday. Photo: AFP

US President Donald Trump on Sunday faced allegations that he paid little or no federal income tax for years before he came to power, as his cloudy financial past stoked controversy ahead of the first election debate.

The New York Times alleged the billionaire president paid just $750 of federal income taxes in 2016 - the year he won the White House - and 2017, and no federal income taxes at all in 10 of the previous 15 years because he reported losing more money than he made.

Trump, who immediately dismissed the accusations as "totally fake news," is readying to come face to face with his Democratic opponent Joe Biden in a pivotal live debate on Tuesday.

The Republican leader has broken with presidential tradition by refusing to release his tax returns, fighting a long battle in the courts and triggering speculation about what they might contain.

"First of all, I paid a lot and I paid a lot of state income taxes too... It'll all be revealed," Trump said.

The Times said that Trump reduced his tax bill via a $72.9 million tax refund that is the subject of an Internal Revenue Service audit. He also reportedly took tax deductions on residences, aircraft and $70,000 in hairstyling.

Meanwhile, his golf courses report losing large amounts of money, and hundreds of millions of dollars in loans he personally guaranteed will soon be due for repayment, according to The New York Times.

Democrats jumped on the allegations, with House Speaker Nancy Pelosi saying it showed "Trump's disdain for America's working families," and party colleague Chuck Schumer calling for everyone "who paid more in federal income tax" to raise their hand.

Massachusetts representative Richard Neal, the chair of the House Ways and Means Committee who has tried unsuccessfully to obtain Trump's tax records, said the Times report makes it even more essential for his committee to get the documents.

"It appears that the President has gamed the tax code to his advantage and used legal fights to delay or avoid paying what he owes," Neal said in a statement on his Facebook page.

"Now, Donald Trump is the boss of the agency he considers an adversary. It is essential that the IRS's presidential audit program remain free of interference."

AFP