I obtained copies of my Account Transcripts using the IRS "Get Transcripts" program, and I see the notations "Substitute tax return prepared by IRS" and "Tax return filed." Does that mean the IRS filed my tax return for me? Can they do that?

If you fail to file a federal income tax return and the IRS has income information from other sources, such as W-2s and 1099s, the IRS may prepare a "bare bones" tax return as a basis for making a tax assessment against you, with penalties and interest, of course. The Substitute For Return ("SFR") allows only the standard deduction, one exemption, and single or married-filing-separately filing status. The combination of no itemization of personal deductions and no deduction of business expenses results in significantly overstated income and a resulting over-assessment of tax due. You can still file your own return, which will then be deemed an "amended" return, in order to claim the exemptions, credits and deductions to which you would have been entitled.