Go to Outlook Options => Mail Format tab => Editor Options => Advanced, then scroll down a little ways to the Cut, copy, and paste options. Drop down each option and select "Match Destination Formatting" or "Keep Text Only".
Microsoft Outlook removes line breaks in signatures for messages sent in plain text format. For the sender, the message looks normal but when displayed to the recipient, line breaks are removed so the formatting of the signature is compromised.
Other factors that may cause your sent and forwarded emails to lose formatting are add-ins. Try sending an email in safe mode, and see if the format still changes. If it works in safe mode, restart Outlook and try disabling one add-in at a time to see which add-in is the culprit.
Go to File > Options. In the Outlook Options dialog box, select Mail. Select the Compose messages in this format drop-down arrow and choose the format you want to use as the default for new emails. Select OK.
You can also insert a tab character at the end of the line (just before the CR LF). This extra white space will be at the end of the line and hence not visible to user. You might prefer this to having to insert spaces on the left. Note that a single space is not enough (though perhaps multiple spaces would help, I don't know.)
Start every line with 2 spaces and outlook will be "tricked" into keeping your formatting.
So change
Date of Hire: %HireDate%
Annual Salary: %AnnualIncome%
Reason for Request: %ReasonForRequest%
Name of Voluntary Employee: %FirstName% %LastName%
Total Coverage Applied For: %EECoverageAmount%
Guaranteed Coverage Portion: %GICoveragePortion%
Amount Subject to Medical Evident: %GIOverage%
to
Date of Hire: %HireDate%
Annual Salary: %AnnualIncome%
Reason for Request: %ReasonForRequest%
Name of Voluntary Employee: %FirstName% %LastName%
Total Coverage Applied For: %EECoverageAmount%
Guaranteed Coverage Portion: %GICoveragePortion%
Amount Subject to Medical Evident: %GIOverage%
^^ <--- Two extra spaces at the start of every line
Here is the article I found when researching this problem which goes into a little more depth than my answer.
This answer is on how to "disable" the feature from the Outlook Client.
FYI:I am using Outlook 2007
Adding "\t\r\n" ( \t for TAB) instead of "\r\n" worked for me on Outlook 2010.
I have always had better luck formatting e-mails as html. You may still have the end-user issue of having to set the client to allow html format, but they are usually more familiar with this since so many e-mails do come html formatted. You also have a little more work on your end adding the html tags, but the end result is much more controllable.
@ephemient also suggests: Send as both HTML and plaintext. Good clients will show the latter, Outlook will show the former, everybody is happy (except the programmer who has to do more work).
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