var originalStr:String = "<p>Each<br>word<br>should<br>be<br>on<br>a<br>new<br>line.</p><p>\tThis line should be tabbed.</p><p>But this line shouldn't be tabbed.</p><p><li>Bullet points don't work though</li><li>Bullet points don't work though</li><li>Bullet points don't work though</li></p><p>Paste into Notepad to view the results!</p>";

var textfieldStr:String = unescape(originalStr);

var tf:TextField = new TextField();
tf.multiline = true;
tf.width = stage.stageWidth;
tf.height = stage.stageHeight;
addChild(tf);
tf.htmlText = textfieldStr;

var clipboardForNotepadStr:String = unescape(tf.text.replace(/\r/g, '
'));
System.setClipboard(clipboardForNotepadStr);

Linebreaks differ between Flash TextField and a plain text file like Notepad. In this example we convert the html linebreaks in Flash to \r\n

AS3 Convert TextField LineBreaks to CRLF for Display as Plain Text (Notepad) on Windows

text, line

ActionScript 3