Is it illegal to portray a government entity in a film?

This depends what you mean as "government entity" and if your movie is meant to be fiction or nonfiction. Generally, you can have characters in a film be fictitious government officials, or public figures. For example, you can have a fictional TSA agent and give them any name you wish and have them do anything, in your fictional movie. You can also have any public character, such as any president, and have them do anything in your fictional movie. If the public figure person is alive and if you are defaming them, then you may have problems, especially if you are acting maliciously or with reckless disregard for the truth. If it is parody or satire of a public figure, that may be okay. You can also do parody or satire of a fictionalized non-public character and not using any real name, such as a TSA agent. Where you also run into trouble is if you take a non-public character, such a someone who may be a government employee, but who is not an elected official, and use their name, image, etc. This is the difference between public figure and non-public figure. The rules are quite different. If by "entity" you mean something like the FBI, NSA, DOJ, sure, people make fictionalized movies all the time where there is an FBI headquarters and agents, etc. If, on the other hand, you want to portray a real FBI agent, using his or her real name, and either revealing personal information or creating false information. you will have a problem, because an FBI agent is not a "public figure" for most purposes, other than in the specific context of a news-reported event.