The Argentine striker will face disciplinary action after he allegedly refused to come off the substitutes' bench during City's Champions League match against Bayern Munich last month.
"There are a number of options to consider but ideally I would like a situation where both parties can walk away from it," Taylor told talkSPORT.
"He is back at the club, the transfer window is not open until January, we've got the position of the manager, the position of the player, and to try and make sure both sides of that dispute can keep their head up high.
"The most extreme option could be termination if the evidence justifies that or it could be a suspension without pay, or it could be a fine, and that could be anything from two weeks up to six weeks, with the approval of the PFA."
Manchester City also revealed that Tevez will attend training on Thursday after serving an initial two-week ban.