The correct answer is (C):
This is a relatively easy question. There are a few clues that we must notice in order to get the sequence correct in shorter time.
The pronoun ‘such activities’ in statement 2 must refer to some activities. The only noun it could refer to is phoenixing, which has been introduced in sentence 3. Since statement 3 opens the idea of phoenixing, it should start the paragraph. After statement 3 we can have either 4 or 2. 2 makes more sense because it further adds more information about the idea of phoenixing. Thus 3 and 2 form a pair, and 4 and 1 form another pair because ‘his taxpayers’ in statement 1 should refer to a noun, which can be found in statement 4 in the Australian minister for Revenue and Services.
Thus 3241 form a logical sequence.