The car, ______ was parked illegally, was towed away.
Correct: A
The clause "was parked illegally" is a non-essential (or non-restrictive) clause because it provides additional, non-crucial information and is set off by commas. For non-essential clauses referring to things, "which" is used. "That" is used for essential (restrictive) clauses and does not take commas. "Who" and "whom" refer to people.