Step 1: Differentiate \(f(x)\) in each interval.
For
\[
|x|\leq 1,
\]
we have
\[
f(x)=\tan^{-1}x
\]
Therefore,
\[
f'(x)=\frac{1}{1+x^2}
\]
which exists for all
\[
-1\lt x\lt 1.
\]
For
\[
|x|\gt 1,
\]
\[
f(x)=\frac{1}{2}(|x|-1)
\]
When
\[
x\gt 1,
\]
\[
|x|=x
\]
Hence,
\[
f(x)=\frac{x-1}{2}
\]
and
\[
f'(x)=\frac{1}{2}.
\]
When
\[
x\lt -1,
\]
\[
|x|=-x
\]
Hence,
\[
f(x)=\frac{-x-1}{2}
\]
and
\[
f'(x)=-\frac{1}{2}.
\]
Step 2: Check differentiability at \(x=1\).
First check continuity:
From the left,
\[
f(1)=\tan^{-1}(1)=\frac{\pi}{4}.
\]
From the right,
\[
\lim_{x\to 1^+}\frac{|x|-1}{2}
=
\lim_{x\to 1^+}\frac{x-1}{2}
=0.
\]
The function is discontinuous at
\[
x=1.
\]
Hence,
\[
f'(1)
\]
does not exist.
Now compute the one-sided derivatives.
Left derivative:
\[
f'_-(1)=\frac{1}{1+1^2}
=\frac{1}{2}.
\]
Right derivative:
\[
f'_+(1)=\frac{1}{2}.
\]
Although the one-sided derivatives are equal, the function is not continuous at \(x=1\), so \(f'(1)\) does not exist.
Step 3: Check differentiability at \(x=-1\).
From the right,
\[
f'_+(-1)
=
\frac{1}{1+(-1)^2}
=
\frac{1}{2}.
\]
From the left,
\[
f'_-( -1 )
=
-\frac{1}{2}.
\]
Since
\[
f'_+(-1)\neq f'_-( -1 ),
\]
the derivative does not exist at
\[
x=-1.
\]
Step 4: Determine the domain of \(f'(x)\).
The derivative exists everywhere except at
\[
x=-1.
\]
Therefore,
\[
\text{Domain}(f')
=
\mathbb{R}-\{-1\}.
\]
Step 5: Final conclusion.
Hence,
\[
\boxed{\mathbb{R}-\{-1\}}
\]