In a large skillet, cook beef and 1/2 cup onion over medium heat until meat is no longer pink; drain. Stir in the taco seasoning, tomato sauce and water. Bring to boil; reduce heat and simmer for 1 minute.
Spread into a greased 13-in. x 9-in. baking dish. Top with the green chilies, beans and potatoes. In a large bowl, combine the soup, milk, green pepper, Worcestershire sauce, sugar and remaining onion; pour over potatoes. Sprinkle with paprika.
Cover and bake at 350° for 1 hour. Uncover and bake for 15 minutes or until lightly browned. Let stand for 10 minutes before cutting. Yield: 8 servings.