Troubled Portsmouth, owned by Saudi businessman Ali al Faraj, are not only bottom of the Premier League but have huge financial worries and have paid player salaries late three times this season.
The club are also facing a winding-up order from the Government and go to the High Court on Wednesday to argue the Value Added Tax portion of their tax debt is too high at 7.5 million pounds.
Taylor, speaking on BBC's Sportsweek programme, said Portsmouth could suffer the same fate as League One Leeds United and fall through the leagues if the financial situation was not remedied.
"It's always a possibility when you see clubs over-reach themselves," he said.
"But you like clubs to be in the ownership of people who are prepared to declare their interests and be up front about it and you want them to be football lovers involved for the right reasons.
"That may well be the case but there's a lack of evidence of that, not just at Portsmouth but with other clubs as well, so that gives you cause for concern."
Portsmouth's executive director Mark Jacob told the same programme he could not guarantee the player wages would be paid on time this month but expected they would be.
He added media reports the club were between 60-100 million pounds in debt were "way off the mark" but would not disclose precise figures.
Jacob said: "If the situation seems bleak now I can assure you it was dire in September.
"The position then was such that if Mr Al Faraj had not taken over in October then I have no doubt the club would have been in administration in a short period of time."
Taylor said Premier League officials were worried about Portsmouth's future.
"It's in a mess and it's like the Oscar Wilde quote, once is unfortunate, twice looks like carelessness and we're into the third time they have been late with wages," he said.
"It's not what you expect of a Premier League club and that's why the Premier League is so concerned about the situation."
