Magnetism in graphene is of fundamental as well as technological interest, with potential applications in molecular magnets and spintronic devices. While defects and/or adsorbates in freestanding graphene nanoribbons and graphene sheets have been shown to cause itinerant magnetism, controlling the density and distribution of defects and adsorbates is in general difficult. We show from first principles calculations that graphene buffer layers on SiC(0001) can also show intrinsic magnetism. The formation of graphene-substrate chemical bonds disrupts the graphene pi-bonds and causes localization of graphene states near the Fermi level. Exchange interactions between these states lead to itinerant magnetism in the graphene buffer layer. We demonstrate the occurrence of magnetism in graphene buffer layers on both bulk-terminated as well as more realistic adatom-terminated SiC(0001) surfaces. Our calculations show that adatom density has a profound effect on the spin distribution in the graphene buffer layer, thereby providing a means of engineering magnetism in epitaxial graphene.