Remote host said: 554 5.1.0 Sender denied

If you get the following when sending a message to someone using exchange 2007 or higher. 

Remote host said: 554 5.1.0 Sender denied

Seems like a server side error but actually now outlook or OWA on the application can cause this issue. If a user adds the email address or domain to the block list it will come back with Sender Denied.