The passage contains a few factual statements that could potentially become premises of an argument, but it doesn't contain any actual argumentation or make any claims/points. The correct answer is the statement that, if added to the passage, becomes a conclusion that's reasonably well supported by the original set of statements.
So, let's consider the passage with each answer-choice statement added to it in turn, and see which version ends up containing some semblance of a valid argument.
(A) The passage says nothing at all about tax refunds or credits, so it can't possibly support a conclusion about those things. Moreover, in real-world terms this statement is ridiculous (what taxpayer doesn't want to get as much money back as possible?); GMAT passages will never argue points that are unreasonable or absurd in the real world, so you can also get rid of this choice just because it's crazy.
(B) The given information says exactly the opposite about most American taxpayers: that they do fear the consequences of an audit. This statement is not limited to any specified subset of taxpayers (implying that the truth falls closer to the opposite of choice B)—nor does the passage assert the existence of any taxpayers who do NOT fear those things (making it impossible for the given information to support choice B in any way).
(C) A "friendly image" is an impression of posing no threat. If the IRS were to adopt such an image, common sense says that the resulting impression would erode at least some American taxpayers' "respectful fear" of the IRS. If that were to happen, then—as the second sentence of the passage tells us—there would be a negative impact on the timely collection of tax monies.
Thus the given information DOES support this choice as a conclusion, so C is the correct answer.
(D) The passage consists only of statements that are true now. There are no lookbacks to any situation that obtained in the past, so the passage cannot possibly support any kind of historical comparison.
(E) This statement gives a concrete reason why it's important for the IRS to collect as much tax money on time as possible, so it might be useful to combine with the existing statements if you wanted to prove some further point. The current collection of statements doesn't show that this statement is true, though—so this statement cannot be positioned as the conclusion of the current set of statements.