Error Message: You can’t use the domain because it’s not an accepted domain for your organization.
Error Messages are not allways easy to understand, so here are some explanation for this message.
Your organization = Office 365 Active Directory Organization.
Accepted Domain = Office 365 Verified Domains.
So after understanding that we understood there was a domain involved we haven’t verified in the Office 365 Tenant.
First we checked the users Principal Name incase this user had a different name like .local, but it was the right PN.
So it wasn’t there, but where else can we use several domains? E-mail alias?
Oh Yes!! The user have aliases including domains not verified in Office 365 Tenant.
You either have to add and verify the domain, or if it isn’t in use anymore, delete the name from Exchange and Active Directory.