About two years ago I was hired to work for a real estate company with a notorious bad reputation of not doing buisiness the right way. I was a regular employee with set hours and came in on a daily basis. However, they 1099'd me is that legal? Could I be in trouble for that?

Generally if you are involved in selling real estate, agents receive 1099's. If you worked as an administrator and not commissioned you should have received W-2. You can amend prior tax return, pay additional FICA and medicare taxes with a letter of explanation to the IRS.

Yes normally real esate agents are all paid on commission even if they have officie hours they have to do. If you were the office clerk, who was paid hourly that is different. But even some office clerks are actually paid by a percentage or a base on the sales of the salespeople for their "helping" them.

So tell us what job you were doing for the real estate