I've spent a lot of time looking for something that seems so logical
it must exist, but I can't find it.  I want a software security
application that blocks EVERY INCOMING EMAIL and returns it to the
SENDER if that SENDER is not on a list of my approved contacts.  I
don't want emails filtered and sent off to another folder where I then
have to waste more time going through them.  I simply don't want them
at all.  A Sender must contact me before hand and get his email
address on my approved contact list before ANYTHING gets through to
me.

You can do that with ZoneAlarm Internet Security. It's what I do.

-JtB

Mailwasher keeps a kill list and bounces mail

http://www.mailwasher.net/

You could probably configure its rules to bounce all not in the 'friends' list

Trouble is a lot of Spam comes with a bogus sender/reply address
- so bouncing is not as satisfying as it used to be

Allowing only e-mails from an "approved" list is known as whitelisting
(the oppositie of blacklisting, or blocking a certain list).  I know
there are programs which do this, but I don't have personal experience
with them.  A search on "e-mail whitelist" or something similar might
be productive.

I think it should be emphasized that you absolutely should not bounce
the messages back to the From: address. Spam and messages generated by
trojans or viruses never have the real senders address and often use
addresses harvested from an infected PC.

Michael1776,

Although I don't know of a software application that will do what
you're wantint to do on your behalf; the guys over at www.port995.com
do offer a hosted fully fledged email package, and the whitelisting
and automatic whitelisting sounds like something which may be of
interest.

If someone emails you, the system will automatically send them an
email back requesting them to comfirm that they sent the email.  If
they do they get added to your whitelist.  If they don't they get
black listed.  You can always go on and manually delete people from
the whitelist.

Probably not exactly what you're looking for I appreciate, but
hopefully may be of use!

SL