Check out http://www.swannysmodels.com/Seams.html
You should be applying the tape, then the putty, and then removing the tape BEFORE the putty dries up too much. Then, you use the nail polish remover to smooth it out.
Just in case I misinterpreted the question and you ARE doing it in this order, I would suggest trying to remove the putty from the sides first. What I mean is, don’t wipe the seam…wipe to one side, then the other. This way you will be working in toward the seam and leaving most of the putty where it should be. Then, when the sides are cleaned up, wipe down the seam to the desired level. This may take some time, so don’t rush.
Plan B would be to break out the ol’ sandpaper and sanding sticks and do it the traditional way.