Greetings, I have a somewhat interesting question that I hope you can help with.
Scenario in short:

Person A agrees to pay Person B commission. Sales and commissions are consummated.
Person A issues W2 Indep. Contract in 2006 which is signed/faxed under duress by Person B
Person A never signs/faxes back signed agreement
Person B assumes no signed agreement, contract is therefore not legitimate

2 years later, in 2008, Person A goes into a campaign of harassment (emails, Voicemails, etc) to Person B to solicit more business. Now claims a 1099 will be issued against all previously signed checks from 2006) and unless all checks are paid back, will issue a 1099 or W2 to the employment company of Person B.

Is this considered harassment legit and can they issue a w2 or 1099 2 years after?

If the money was paid in 2006, even without a signed countract, that money is considered to be taxable earned income in the eyes of the IRS.

Yes, they CAN issue the W-2 or 1099 two years late. They will pay a significant fine to the IRS for the late issuance, but it IS legal In my opinion.