Place bacon pieces in a large Dutch Oven or soup pot over medium heat and cook until bacon is crisp and browned.
Remove bacon pieces and set aside, leaving the fat in the pot.
Add butter and chopped onion and cook over medium heat until onions are tender (3-5 minutes).
Add garlic and cook until fragrant (about 30 seconds).
Sprinkle the flour over the ingredients in the pot and stir until smooth (use whisk if needed).
Add 1/2 of the diced potatoes to the pot along with chicken broth, milk, heavy cream, salt, pepper, and ancho chili powder. Stir well.
Bring to a boil and cook until potatoes are tender when pierced with a fork (about 10 minutes). Puree until smooth with immersion blender.
In a separate pot boil the other half of the diced potatoes until tender. Drain and add to puree soup.
Add sour cream and bacon and simmer for 15 minutes.
Top with additional sour cream, bacon, cheddar cheese, or chives. Enjoy!