This issue can also occur if 'All Authenticated Users' is removed from 'People and Groups' list for the site collection on a classic-mode web application.
For classic web application, add 'NT AUTHORITY\authenticated users' with 'Read' permissions on List
For claims-based web application, add 'All Authenticated Users' with 'Read' Permissions on List
Note: 'TaxonomyHiddenList' is a hidden list and is not visible in the UI
Article ID: 2439274 - Last Review: Dec 19, 2012 - Revision: 1