Reporting a cost basis of $0 would not increase your chance of being audited. It will just increase your capital gain and cause you to pay more tax.
You can calculate the cost basis of the fractional share resulting from a merger.
For example, if you had 100 shares of ABC with a cost basis of $200. Then those 100 shares of ABC are exchanged for 5,25 shares of XYZ. So the cost basis remains the same for the 5.25 shares of XYZ at $200. Therefore, the 0.25 fractional share has a cost basis of $200/5.25 x 0.25 = $9.52.
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