Whoever installed the drywall in my home did not tape the joints. Now there are cracks along all the panels. I would like to tape them myself before I paint. The stucco compound is very hard to chip away, and dangerous.

Is there a method to chipping off plaster from dry wall?

Or Should I apply the tape on the wall surface and smooth it out with more compound instead of chipping?

 

Apply tape over the top. You will need to treat it just like a butt joint. It will need to be feathered out to be about 16" wide by the time you are done. It looks like your walls have a texture on them. That complicates things. It would be best if you could sand off that texture so that your knife doesn't bump over all the ridges. But sanding through paint is pretty difficult. So you will probably have to wet sponge all your edges (once they are dry) to feather that edge and kind of wash the joint compound out of the texture along the edges, or else you will have a definite line along the walls. You will then have to re texture when you're done... probably the entire wall, not just the repair.

 

As mentioned, latex paints don't sand well - I'd scrape off any loose and then just scuff sand it with 80 grit. A wet sponge works good and great for eliminating sanding dust but require that the j/c be applied evenly, it won't level out highs and lows. If the 3rd coat needs to be leveled out I'd suggest using a sanding pole first and then finish up with a sponge along the edges.

I'd probably just texture the repairs and if it looks good, great - if not, then retexture the walls.