The 56-year-old writer and actor is facing a lawsuit from Lauren J Salkin in what her lawyer has described as a "classic David versus Goliath situation".
A copyright infringement lawsuit was filed against Sheridan on Friday in the US District Court for the Central District of California.
According to the Daily Mail newspaper, Sheridan is named as defendants alongside his management company Elevate Entertainment, NBCUniversal, Paramount and more.
Salkin has claimed she presented a pilot, concept, storylines and a pitch deck for a TV series, Sovereign Nation, to Sheridan's reps at Elevate some time between late 2016 and early 2017.
In the complaint, she described her show as a "dramatic television series centred on tribal governance, casino-driven economic power, and a modern war over land and development".
Salkin has claimed that her pitch was turned down on February 1, 2017.
She alleged the correspondence from the company said: "Taylor thanks you very much for your interest. Unfortunately, he's unavailable for TV projects."
It is alleged Paramount greenlit Yellowstone "within a month", while she pointed to several examples - including story mechanisms, character functions and plot devices - to suggest there are many parallels between the ideas.
She has also alleged that a senior creative executive at HBO has reviewed materials for both projects and recognised similarities.
It is claimed that the executive had "terminated Sheridan's project at HBO for that reason".
Salkin is seeing damages and profits, plus an injunction which would prevent the defendants from continuing to use her copyright material.
The complaint argues that Salkin has "received nothing", despite the Yellowstone franchise generating "billions of dollars" across the original show, plus spin-offs 1883, 1923, Marshals and Dutton Ranch.
Her lead lawyer Paul B Lackey told the Mail in a statement: "This is a classic David versus Goliath situation.
"She spent years putting together the specific and multi-layered framework for a story that has become the biggest streaming success of all time.
"She has watched the vast commercial success of this story that was stolen from her and decided that enough was enough.
"We will do everything in our power to get her justice."
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