I have setup an intranet email system using postfix, dovecot and squirrel mail, Which is working fine, I can send and receive mail to all users on the system. I presume that the issue is in the postfix configuration, because when I configure Thunderbird to send mail I am getting the following error:

An error occurred while sending mail. The mail server responded:  4.1.8 <[email protected]>: Sender address rejected: Domain not found. Please check the message recipient [email protected] and try again.

Also here is the relevant syslog entries:

NOQUEUE: reject: RCPT from host1.intranetdomain.com [More Information] [192.168.11.1 [More Information] ]: 450 4.1.8 <[email protected]>: Sender address rejected: Domain not found; from=<[email protected]> to=<[email protected]> proto=ESMTP helo=<[127.0.0.1 [More Information] ]> 

I have configured MX records on the DNS server and they respond appropriately when I query them for those MX records, so I do not think that is the issue. I think that my issue is caused by the default configuration of:

smtpd_recipient_restrictions = reject_unknown_sender_domain, reject_unknown_recipient_domain, reject_unauth_pipelining, permit_mynetworks, permit_sasl_authenticated, reject_unauth_destination 
smtpd_sender_restrictions = reject_unknown_sender_domain

Since this is on an internal network and it will not be exposed to the internet as a whole which options can I remove safely?