We bought a house with extra room built no permit. The city suddenly issued an inspection what now?!?

we bought our house 3 years ago. It has an additional studio attached to the house. I was working on building a small shed in the back yard. Now someone has somehow reported it. I hope they just take the shed away. But they are asking to come for inspection and we know we have a studio which is perfectly built... show more we bought our house 3 years ago. It has an additional studio attached to the house. I was working on building a small shed in the back yard.

Now someone has somehow reported it. I hope they just take the shed away. But they are asking to come for inspection and we know we have a studio which is perfectly built that doesn't have a permit.

I am so scared. what should i do? what will happen.
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