Well, from the info you've told us, you technically aren't doing anything.
You haven't specified your game, so for all I know, you might not be playing X and Y. The Destiny Knot's breeding mechanics only work in X and Y - if you're playing HGSS or any Gen V game, the IV inheritance advantage items are the Power items. Each item passes down the IV it stimulates in battle. The list is here.
I'll also let you know though that only one parent needs to hold the Destiny Knot; even if one parent holds it, both parents will pass their IVs down. :)
If you've done all these things, just continue trying! I hope you find your perfect Smeargle soon.
Hope I helped. :)
Source: Above link.