This paper presents the extension of a well-established immersed boundary/cut-cell method, the LS-STAG method (Cheny and Botella in J Comput Phys 229:1043―1076, 2010), to non-Newtonian flow computations in 2D irregular geometries. One of the distinguished features of our IB method is to use level-set techniques in the cut-cells near the irregular boundary, where accurate discretization is of paramount importance for stability and accuracy of the computations. For this purpose, we present here an accurate discretization of the velocity gradients and shear rate in the cut-cells that fits elegantly in the framework of the velocity―pressure―stress staggered arrangement and the special quadratures developed previously for viscoelastic flows. After assessing the accuracy of the discretization on a benchmark solution for power-law fluids, the LS-STAG code is applied to the flow of various shear-thinning xanthan solutions in a wide-gap, non-coaxial, Taylor―Couette reactor for which rheological characterization, experimental flow measurements (PIV) and FLUENT simulations have recently been performed in our group. Our numerical investigation will give new insight on the flow patterns (onset, size and position of the recirculation zone) and will firmly correlate them to global flow properties such as shear-thinning index, generalized Reynolds number and torque ratio at the cylinders.