phpMailer: Could not instantiate mail function - php

Question

I created a form that uses phpMailer to email the results to the website owner. Of course, before I add the owner's email address I use mine to test that the form works. When I use my email the form sends perfectly, however, when I use the owner's address it throws the error "could not instantiate mail function" and won't send the form. The error only occurs with email addresses associated with the owner's domain. Any idea why this could be happening?
If I type this into the command line it works fine:
echo 'test' | mail -s 'test' me#example.com
edit: I wasn't initially using SMTP, but it's now configured as shown below. The error message is now "SMTP Error: The following recipients have failed xxx#somedomain.com" and the end result is still the same. It can e-mail to a number of gmail test addresses but has issue with the owner's email#hisdomain.com. Further, with SMTPDebug it's now producing the error "RCPT TO command failed: 550 No Such User Here" The owner's e-mail, however, works without issue when e-mailed through gmail, outlook, etc.
phpMailer code:
$mail = new PHPMailer();
$mail->IsSMTP();
$mail->SMTPDebug = 1;
$mail->Debugoutput = "error_log";
$mail->Host = "mail.mydomain.com";
$mail->SMTPAuth = true;
$mail->Username = "admin#mydomain.com";
$mail->Password = "XXXXXXXXXXXXXXX";
$mail->CharSet = 'UTF-8';
$mail->AddReplyTo($emailAddress);
$mail->SetFrom("admin#mydomain.com");
$mail->AddAddress($toAddress,$toName);
$mail->Subject = $emailSubject;
$mail->isHTML(true);
$mail->Body = $emailBody;
$mail->AltBody = strip_tags($emailBody);
// Attempt to send the e-mail
if (!$mail->send()) {
//error handling
}

Answer 1

There are couple of things you should try and check with this particular error message:
Make sure you can use regular php mail() function. Create a blank page and use the php mail() to send a test email. If that works, maybe its your SMTP that's having issues with the particular user domain. Setup gmail SMTP or a different SMTP to send emails:
$mail->IsSMTP();
$mail->Host = "smtp.domain.com";
// optional
// used only when SMTP requires authentication
$mail->SMTPAuth = true;
$mail->Username = 'smtp_username';
$mail->Password = 'smtp_password';
Can you share your phpMailer source for us to view?

Answer 2

Set $mail->SMTPDebug = 2; so you can see what the server has to say, and read the troubleshooting guide.
You're using authentication without encryption, which is not a good combination and many servers won't allow that. Add this:
$mail->SMTPSecure = 'tls';
$mail->Port = 587;
You've based your code on an old example, so you're probably using an old version of PHPMailer too; get the latest from github.