I do not put books in section by reading level and I do not mark anything that would be visible. We use IRLA in our district. If I know a level, I will write it inside the front cover in small writing but that's it. 

I keep a spreadsheet with a separate tab for each level. I share the spreadsheet with teachers so they can look up specific levels. Often times, for low or high readers, teachers will call when they are sending specific students to the library so I can look up books in advance. 

I work with classes and students to teach them to judge a book for themselves. They need to decide if a book is too difficult or too easy for them by reading a little of it.