I am a volunteer that gets a stipend. I turned in w4 forms because they said IRS said they had to deduct taxes. They lost the forms so now they are threatening to hold stipend until forms are in. Is that legal?

Yes it's legal - by law they must withhold taxes per the information on your W4. What's the problem? Just give them another W4.

Yes, it takes about 5 minutes or less to do the form, just give them another set of forms.