I have a customer that we are rebuilding a site for and question has arisen that I haven't come across. They used a domain for their original website and hired an SEO company that gave them a bunch of black hat back links and destroyed their sites rank. So they switched domains and started over and it has been running for about a year now. It's ranked better but still very poorly well beyond the forth page. The original domain still points to that site. Could that be causing additional trouble? Also they would like to go back to using that original domain, is that a good idea since it took such a hit? I don't want to shoot ourselves in the organicaly ranking foot because of their past. Also original domain has been pointing to the new domain for about a year now. Any guidance on this would be super helpful.
I don't think it's a good idea to use that old domain that has been hit. Also check if they are on the same IP (if it's a shared hosting). There are times that when a website under that particular shared IP is hit, the sites registered under that IP will also suffer some consequence.
It's better to remove any connection with that old and penalized domain.You may use an image to announce that that site used to be thatdomain.com - no hyperlink, just an image for UX only.
Also don't redirect the penalized domain to the new one. It's useless to get that bad juice. Good luck!