You must see it from the point of view of the SECOND server (second microsoft 
365 that the tenant is hosted on).
Not the intermediate "smarthost" Microsoft 365 server that directly receives 
your mail based on SPF.

The second server has no way to know that the first server really validated SPF 
on the incoming mail.

Or better: See all Microsoft 365 servers as one big server.

The problem is as follows:
When you add the "smarthost" Microsoft 365 server in your SPF so the council 
can send via it, the receiving server (microsoft 365 tenant) cannot use the SPF.

Why?
Because when a Microsoft 365 server sends mail to a Microsoft 365 server, it 
uses internal adresses, thus it can't use SPF at all.


You must understand more whats going on "under the hood", not just the server 
you are talking to, but the communication between your server, intermediate 
Microsoft servers, and the tenant server.
This is why Microsoft says "DirectSend is REQUIRED for their infrastructure to 
work".

Its kind of an "internal SPF" that is only valid for microsoft hosted domains 
sending to microsoft..


Think like a Microsoft-issued ID card (DirectSend) which is required inside 
Microsoft premises, but you can't buy alcohol with a Microsoft ID card.
Then you have a state-issued ID-card (kind of) - SPF - but that doesn't work 
inside Microsoft premises.


I KNOW - its a extremely "hackish" way to facilitate internal communication 
between Microsoft servers, which also hurts certain external senders sending 
from Microsoft-hosted domains to Microsoft servers. But given Microsofts 
infrastructure, its the only way.


If you actually look on the "Received:" lines inside a email that have entered 
Microsoft infrastructure, you will see a LOT of intermediate hops.


I haven't tried, but im pretty sure you can actually send mail destined for any 
tenant to any mail-protection.outlook.com domain. Microsoft will just shuffle 
the mail right, because it sees the domain and knows its a microsoft tenant. 
And here is where DirectSend comes in, ALL Microsoft Servers needs to be able 
to validate if the Tenant domain is valid as a sender, either via SMTP Auth or 
via DirectSend configuration.

-----------------------------------------------------------------------------------------------------------------

As I said, ask the council to create a account for you in their Microsoft 365 
Server.
Then send the invoices via that account.


Best regards, Sebastian Nielsen

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