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You can tell the diff to ignore differences in white space by clicking on the little gear icon to the right, but I'm not aware of a way to get it to actually show a visible representation of the white space, if that's what you're looking for (I can see where that might be handy)
Screen Shot 2016-01-08 at 11.01.34 AM.png
Yeah, I think he wants to identify what type of whitespace is involved. Looks like he already has the diff taking whitespace into account. I think 3rd party diff tools are necessary to display some sort of indication about what types of whitespace are involved (spaces vs tabs, trailing spaces, line endings).