The magic of the story is that he is a real person with a real life. They met. They shook hands. He begged for his life.
Though he felt like a character from a book - her world and his world were the same world. He lived an entire life, one characterized before the book began as dull - it was still a life and it was his.
Though she had either premonitions or demigod-like powers, she was a real woman in the same world in which he lived. She lived her entire life in the same world without any awareness of being a character in a story.
Beings just born into existence do not suddenly gain membership in the IRS. The IRS has an amazing bureaucracy. For her to write him into existence is huge. It is much more than creating a being with illegal-alien-esque status. She would have to have demigod-like powers over the IRS. Given that, according to many sources, the IRS has their own demigod-like powers (possibly from being in league with darkness, possibly by presidential decree) she would have to have very serious extra power compared to normal demigod-like powers to create Harold as a lifelong and successful employee. Counter-evidences to her being a demigod-like being are her suffering in the rain (being subject to it), her smoking habit (addiction), her being subject to a publisher and publishers assistant. High power demigod-like beings typically are not subject to such petty things and when they are it is just one, not a multiplicity of them. It is more likely that she was a subject of the world around her, and that she did not re-engineer the documentation and nature of the IRS.
Within the world in which they lived, and according to both the story of Karen and of Harold - he lived before she started writing.
Note: I feel like "Miracle on 34th Street" but unlike defending the existence of Santa Claus, I am proving the existence of a (mathematically excellent) normal human. Thank you for that.