WASHINGTON — The municipal bond market may benefit from the shake-up at the Internal Revenue Service as the newly named acting commissioner, Daniel Werfel, has close ties with state and local governments and is viewed by market groups as a strong ally.

Werfel, 42, will replace ousted IRS chief Stephen Miller, who was forced to resign this week over a scandal alleged targeting of conservative groups by the agency. Werfel, the controller of the Office of Management and Budget who oversaw the day-to-day operations at the budget office, will take the reins at the IRS effective Wednesday, May 22, President Obama said.

Over the past six months, Werfel has been leading the operation to ensure that federal departments and agencies adhere to the across-the-board budget cuts known as sequestration. He was instrumental in implementing guidance on the American Recovery and Reinvestment Act of 2009 and worked closely with groups like the National Association of State Auditors, Comptrollers and Treasurers, the National Governors Association and the National League of Cities.

Cornelia Chebinou, Washington office director with NASACT, said that she was a little surprised he is taking over at the IRS because tax wasn’t his baileywick, but he is a strong manager and leader.

“I think he will be very big on outreach and transparency and making sure that people are aware of his position and how he will solve problems,” Chebinou said. “He knows the benefit of partnerships instead of being pushed down all the time with the federal government telling the states what to do. Its more about solving problems and working together to get solutions.”

Chebinou and other state and local groups had weekly phone calls with Werfel for nearly two years on the implementation of the recovery and reinvestment act. Chebinou recalls him being open and always willing to make time for states. The NASACT thinks very highly of him, Chebinou said.

Werfel became the point person at OMB in regards to ARRA rules on how the money, approximately $260 billion, would flow to or through state governments.

“In our view, the collaboration that occurred under his direction and leadership was commendable and should serve as a strong example of how federal, state, and local governments should interact on an ongoing basis,” said Clarence Anthony, executive director with the NLC.

One state official said that Werfel was one of the best listeners, especially when it came to the concerns of state and local governments.

“His willingness to get on the phone with states directly was absolutely essential to that whole process,” the official said. “Where other federal officials may have avoid direct contact. He made himself available and through that process we got a better end result.”

The IRS has a significant role in implementing the Patient Protection and Affordable Care Act, and Chebinou hopes that Werfel will continue working with states as pieces of that law go into effect.

David Quam, director of federal relations at the NGA, echoed Chebinou’s comments about Werfel. “There is a recognition that state and federal governments are always not aligned and there can be and often will be meaningful differences, but he understands that and he understands the work it takes to bridge those gaps,” Quam said. “He has already done that.”

Werfel holds a Masters Degree in Public Policy from Duke University, a Juris Doctor from the University of North Carolina at Chapel Hill, and a Bachelors Degree in Industrial and Labor Relations from Cornell University.