By default, IsValidForAdvancedFind property of Party Lists is set to false in metadata. You cannot apply direct filter on Party Lists, hence it gives “Invalid argument” error while querying on Party Lists in advanced find.

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As we know anytime a record is added to the Party Lists an associated record is created in the Activity Party table.

Solution – You can choose “Activity Parties” as related entity (secondary) in advanced find to filter data on Party lists. When you select Activity Parties, you must provide values for Participant Type and Party.

  • Participant Type – would be based on Party list attribute you want to filter on. Below are various Participant types in Dynamics 365:
    • BCC Recipient
    • CC Recipient
    • Customer
    • Optional attendee
    • Organizer
    • Owner
    • Regarding
    • Required attendee
    • Resource
    • To Recipient
    • Sender
  • Party – actual values to be filtered on

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References:

https://community.dynamics.com/crm/b/crmdevmigrationconfigandcustomization/archive/2017/07/07/use-party-lists-in-advanced-find