Can a corporation give an interest free or low interest loan to its
shareholders? Employees?

If so the corporation could transfere value to its shareholders
without being tax on it. So I would think the IRS would disallow such
a thing, but am not sure.

Generally the IRS frowns on loans going either direction unless a fair
interest rate is charged.

I can say that in Canada as an Employee the Employee would have the
loan taxed as a taxable benefit (IE you would be taxed on the interest
that you are not paying by having a low or no interest rate).

For instance:

I work of a bank.

I get a Mortgage at say 3%.

If the Govt prescribed minimum interest rate (set quarterly) for
taxation purposes is 5% then the 2% difference will be added to my
income as a taxable benefit and I will pay tax on it.

An interest-free loan to a shareholder is ordinarily considered a
taxable dividend and an interest-free loan to an employee is taxable
compensation (in both cases, at least to the extent of the
bargain-element of the interest, but perhaps the entire amount
depending on the nature and duration of the loan as well as other
facts and circumstances).