The paragraph usually states that the seller has a certain amount of time to correct the problem and produce clear title or you can be released without recourse.
Depending what type of tax liens, your attorney can attempt to negotiate with sellers attorney to get liens released and allow teh sale if teh seller is not getting any profit
good luck working things out
I am not a lawyer and I would certainly talk to one. Specifically, the seller was under contract to sell the home to you. They can be sued for non-performance where you can recoup any lost costs. The problem is two fold. One it is probably more money than can be done in small claims court and two it is hard to get money from someone who doesn't have any. The questions to ask is how much money do you need to spend to try and get some money from the seller and what is the likeliness you will actually get it.
Again, I am not at attorney and you should definitely speak to one.