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Need advice on new mailserver and spam

I've been called in to solve some massive email problems in a company
that has about 30 employees and an external mailserver. They receive
on average about 100 legitimate emails per day and 3000+ spams plus
the usual virus and worm attacks.

I am of course recommending FC with Sendmail, Procmail, SpamAssasin
and ClamAV on an inhouse mailserver, all of which I've had experience
and spectacular results with.

Their spam problem, IMHO, comes from the mailserver they currently use
accepting all non-mailbox email into a postmaster domain com account
which has a quota of 1000 emails, which then sends over-quota
rejection notices to senders for all @domain.com incoming; effectively
shutting down all incoming email. My theory is that the reject notices
are taken as replies by spambots and encourages even more spam.
Short-term measures include emptying postmaster@ every 10 minutes and
filtering for valid mis-addressed emails, but even with that the
volume of incoming spam seriously slows down the service.

My question is - long term - is it better to set up the mailserver to
reject all non-mailbox emails to cut down on the incoming processing
load; or to filter and bit-bucket the spam in the hopes that the
volume will decrease over time with no responses to the spam? Or any
other techniques any of you are using for such problems?

Thanks in advance for opinions/suggestions,

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