The U.S. Internal Revenue Service is cracking down on hedge funds, challenging a tax strategy called “basket options” that they have used to avoid taxes estimated at billions of dollars. Under IRS guidance issued on Wednesday, hedge funds using the options must report them on their tax returns and correct past returns if they used them since Jan. 1, 2011. The guidance came after a U.S. Senate subcommittee reported last year that at least 13 hedge funds were using basket options created by banks to avoid federal taxes.