O'Sullivan said: "It is ready-made for Lindsay... but we're proceeding with extreme caution while the Lohan family sorts through their issues during a very trying time."
Lohan has since served two stints in jail - the latest being a 10-hour stay Friday - and also spent time in a court-ordered lockdown rehab. The producers are now planning to move on from Lohan and have approached Swift for the role.
"It appears the romantic comedy may finally be off the table for Lindsay Lohan. The producers had actually talked to Taylor Swift's agent a few months back about replacing Lindsay, but Taylor was in the middle of her tour," dailystar.co.uk quoted a source as saying.
"Now that Lindsay can't conquer her troubles, they're taking the offer back to Taylor," the source said.
It is the second major role Lohan has lost this year. In April, she was dropped from The Other Side.