We have been using CRM 2015 for a while and had the Outlook client running successfully. Recently we have been experiencing issues using the Set Regarding. 

"An unknown error occurred while synchronizing data to Outlook.Item Name= {Email Subject}"

I have tried to gather data, but without being able to figure out the problem. The user experience are similar to https://community.dynamics.com/crm/f/117/t/163486:

  1. Outgoing email to a contact not in CRM was able to be tracked using Set Regarding to the Account, but not his incoming response using same button.
  2. Where the sender is an internal employee, however not a user of CRM, the a user was unable to track the email using Set Regarding to the Account.  Same user was able to use Set Regarding to a different Account for an email to a contact which was not already in CRM.
  3. User was able to Set Regarding to at least one Account, and was unable to Set Regarding to another where the Contact was not in CRM.  I added the Contact to CRM and asked her to try again, and she got the message that "An unknown error occurred trying to synchronize this item."

Though similar to the permission problem, this is not the same. I have created a test as the System administrator, and I can verify that the problem still occurs. Below is a trace from running Outlook client, while the error occures.  

[2018-09-03 11:45:22.715] Process:OUTLOOK |Organization:d0e5351c-825b-e511-8108-005056b91e5e |Thread:   23 |Category: Application.Outlook |User: 00000000-0000-0000-0000-000000000000 |Level: Error |ReqId: 00000000-0000-0000-0000-000000000000 | CrmServiceForOutlook.Execute  ilOffset = 0x7
	at CrmServiceForOutlook.Execute(OrganizationRequest request, Boolean wrapException)  ilOffset = 0x7
	at EmailForOutlook.Microsoft.Crm.Application.SMWrappers.IEmailForOutlook.DeliverPromote(String messageId, String subject, String from, String to, String cc, String bcc, Double receivedon, String submittedBy, String importance, String body, IDynamicEntityCollectionForOutlook attachments, Int32 attachmentCount, IDynamicEntityForOutlook extraProperties, String entityXml, String regardingId, Int64 regardingObjectType, String crmId, Int32& notification)  ilOffset = 0x1D1
>FaultExceptionDetails: Unhandled Exception: System.ServiceModel.FaultException`1[[Microsoft.Xrm.Sdk.OrganizationServiceFault, Microsoft.Xrm.Sdk, Version=7.0.0.0, Culture=neutral, PublicKeyToken=31bf3856ad364e35]]: SYSTEM user account not found.Detail: 
<OrganizationServiceFault xmlns:i="www.w3.org/.../XMLSchema-instance" xmlns="schemas.microsoft.com/.../Contracts">
  <ErrorCode>-2147220933</ErrorCode>
  <ErrorDetails xmlns:d2p1="schemas.datacontract.org/.../System.Collections.Generic" />
  <Message>SYSTEM user account not found.</Message>
  <Timestamp>2018-09-03T09:45:22.7069861Z</Timestamp>
  <InnerFault>
    <ErrorCode>-2147220933</ErrorCode>
    <ErrorDetails xmlns:d3p1="schemas.datacontract.org/.../System.Collections.Generic" />
    <Message>SYSTEM user account not found.</Message>
    <Timestamp>2018-09-03T09:45:22.7069861Z</Timestamp>
    <InnerFault i:nil="true" />
    <TraceText i:nil="true" />
  </InnerFault>
  <TraceText i:nil="true" />
</OrganizationServiceFault>

Server stack trace: 
   at System.ServiceModel.Channels.ServiceChannel.HandleReply(ProxyOperationRuntime operation, ProxyRpc& rpc)
   at System.ServiceModel.Channels.ServiceChannel.Call(String action, Boolean oneway, ProxyOperationRuntime operation, Object[] ins, Object[] outs, TimeSpan timeout)
   at System.ServiceModel.Channels.ServiceChannelProxy.InvokeService(IMethodCallMessage methodCall, ProxyOperationRuntime operation)
   at System.ServiceModel.Channels.ServiceChannelProxy.Invoke(IMessage message)

Exception rethrown at [0]: 
   at System.Runtime.Remoting.Proxies.RealProxy.HandleReturnMessage(IMessage reqMsg, IMessage retMsg)
   at System.Runtime.Remoting.Proxies.RealProxy.PrivateInvoke(MessageData& msgData, Int32 type)
   at Microsoft.Xrm.Sdk.IOrganizationService.Execute(OrganizationRequest request)
   at Microsoft.Xrm.Sdk.Client.OrganizationServiceProxy.ExecuteCore(OrganizationRequest request)
   at Microsoft.Crm.Application.SMWrappers.ClientOrganizationServiceProxyBase.Execute(OrganizationRequest request)
   at Microsoft.Crm.Application.SMWrappers.CrmServiceForOutlook.Execute(OrganizationRequest request, Boolean wrapException)

[2018-09-03 11:45:22.721] Process:OUTLOOK |Organization:d0e5351c-825b-e511-8108-005056b91e5e |Thread:   23 |Category: Application.Outlook |User: 00000000-0000-0000-0000-000000000000 |Level: Error |ReqId: 00000000-0000-0000-0000-000000000000 | EmailForOutlook.Microsoft.Crm.Application.SMWrappers.IEmailForOutlook.DeliverPromote  ilOffset = 0x1D1
	at EmailForOutlook.Microsoft.Crm.Application.SMWrappers.IEmailForOutlook.DeliverPromote(String messageId, String subject, String from, String to, String cc, String bcc, Double receivedon, String submittedBy, String importance, String body, IDynamicEntityCollectionForOutlook attachments, Int32 attachmentCount, IDynamicEntityForOutlook extraProperties, String entityXml, String regardingId, Int64 regardingObjectType, String crmId, Int32& notification)  ilOffset = 0x1D1
> TraceException: Unhandled Exception: System.Runtime.InteropServices.COMException: SYSTEM user account not found.
   at Microsoft.Crm.Application.SMWrappers.CrmServiceForOutlook.Execute(OrganizationRequest request, Boolean wrapException)
   at Microsoft.Crm.Application.SMWrappers.EmailForOutlook.Microsoft.Crm.Application.SMWrappers.IEmailForOutlook.DeliverPromote(String messageId, String subject, String from, String to, String cc, String bcc, Double receivedon, String submittedBy, String importance, String body, IDynamicEntityCollectionForOutlook attachments, Int32 attachmentCount, IDynamicEntityForOutlook extraProperties, String entityXml, String regardingId, Int64 regardingObjectType, String crmId, Int32& notification)

[2018-09-03 11:45:22.745] Process:OUTLOOK |Organization:d0e5351c-825b-e511-8108-005056b91e5e |Thread:   23 |Category: Exception |User: 00000000-0000-0000-0000-000000000000 |Level: Error |ReqId: 00000000-0000-0000-0000-000000000000 |   ilOffset = 0xFFFFFFFF
>Entity id is null or empty, skip deleting the entity 'email'
[2018-09-03 11:45:22.754] Process:OUTLOOK |Organization:d0e5351c-825b-e511-8108-005056b91e5e |Thread:   23 |Category: Application.Outlook |User: 00000000-0000-0000-0000-000000000000 |Level: Warning |ReqId: 00000000-0000-0000-0000-000000000000 | ResourceForOutlook.Microsoft.Crm.Application.SMWrappers.IResourceForOutlook.GetString  ilOffset = 0x85
	at ResourceForOutlook.Microsoft.Crm.Application.SMWrappers.IResourceForOutlook.GetString(Int32 id)  ilOffset = 0x85
> Exception: System.Runtime.InteropServices.COMException (0x80040203): Resource not found(-2147220933).
   at Microsoft.Crm.Application.SMWrappers.ResourceForOutlook.Microsoft.Crm.Application.SMWrappers.IResourceForOutlook.GetString(Int32 id)
[2018-09-03 11:45:22.758] Process:OUTLOOK |Organization:d0e5351c-825b-e511-8108-005056b91e5e |Thread:   23 |Category: Application.Outlook |User: 00000000-0000-0000-0000-000000000000 |Level: Error |ReqId: 00000000-0000-0000-0000-000000000000 | ProgressDialogForOutlook.Microsoft.Crm.Application.SMWrappers.IProgressDialogForOutlook.SetDetailedErrorMessage  ilOffset = 0x0
	at ProgressDialogForOutlook.Microsoft.Crm.Application.SMWrappers.IProgressDialogForOutlook.SetDetailedErrorMessage(String entityType, String entityName, Boolean warning, String errorMessage, String entryId, String storeId, String crmId, Int32 entityObjectTypeCode, Boolean showDialog)  ilOffset = 0x0
>crm id :'', Error:An unknown error occurred while synchronizing data to Outlook.
[2018-09-03 11:50:13.837] Process:OUTLOOK |Organization:d0e5351c-825b-e511-8108-005056b91e5e |Thread:   23 |Category: Application.Outlook |User: 00000000-0000-0000-0000-000000000000 |Level: Warning |ReqId: 00000000-0000-0000-0000-000000000000 | ResourceForOutlook.Microsoft.Crm.Application.SMWrappers.IResourceForOutlook.GetString  ilOffset = 0x85
	at ResourceForOutlook.Microsoft.Crm.Application.SMWrappers.IResourceForOutlook.GetString(Int32 id)  ilOffset = 0x85
> Exception: System.Runtime.InteropServices.COMException (0x80040203): Resource not found(-2147221067).
   at Microsoft.Crm.Application.SMWrappers.ResourceForOutlook.Microsoft.Crm.Application.SMWrappers.IResourceForOutlook.GetString(Int32 id)
[2018-09-03 11:50:13.838] Process:OUTLOOK |Organization:d0e5351c-825b-e511-8108-005056b91e5e |Thread:   23 |Category: Application.Outlook |User: 00000000-0000-0000-0000-000000000000 |Level: Error |ReqId: 00000000-0000-0000-0000-000000000000 | ProgressDialogForOutlook.Microsoft.Crm.Application.SMWrappers.IProgressDialogForOutlook.SetDetailedErrorMessage  ilOffset = 0x0
	at ProgressDialogForOutlook.Microsoft.Crm.Application.SMWrappers.IProgressDialogForOutlook.SetDetailedErrorMessage(String entityType, String entityName, Boolean warning, String errorMessage, String entryId, String storeId, String crmId, Int32 entityObjectTypeCode, Boolean showDialog)  ilOffset = 0x0
>crm id :'', Error:The selected item cannot be tracked in Microsoft Dynamics CRM.