Do you want to buy Bitcoin without submitting KYC? just use no KYC P2P or DEX, no need to ask your friend to buy behalf from him.
On the other hand, I don't understand why your friend need to hand his coins to you because he has no way to access his coins anymore, what he can is ask or force you to move the coins.
When it comes to tax, your friend will not have tax obligations since he didn't sell his coins, capital gains tax occur after you exchange coins to other assets e.g. coins, fiat etc.
The reason is that he wants to return the money to me this way. But it's probably better if he returns cash to me, and I buy peer-to-peer for cash in the traditional way. Because I don't want him to incur tax obligations after I sell those sats in the future.
I don't know where you guys are from so I also don't know the jurisdiction in your country over cryptocurrency. The regulations about crypto in your country might not be the same as the ones in mine but to be safe I suggest that you guys don't complicate things and just let him give you the cash. But if he doesn't mind all the tax then just let him send it to you.
Since the obligations and regulations of the countries differs,is it also advisable to partake in the investment process and make financial recommendations as well.
Does he really need to comply to the standards,rules and regulations.Maybe its necessary just so they can monitor suspicious and illegal activities.