The passage (Jn 20:19-22) refers to Jesus' appearance to His disciples after His resurrection (you can find a parallel account in Lk 24:36-49, which suggests that we need to refer to BOTH passages to gain maximal understanding). The disciples were chicken-scared about the Jesus-hating Jews, fearing that they may be next on the hit-list (Jn 20:19). When the Lord made His entrance, the disciples panicked cos' they thought they'd seen a ghost! Nevertheless Jesus had the following motives for showing Himself to them:
 

• To prove to them that He was still alive thus validating His prior claims of divinity (Lk 24:44)
• To resurrect(!) their almost-dead hopes and renew their devotion to Him (Jn 20:20)
• To send them out as His witnesses to preach repentance and forgiveness of sins in His name (Lk 24:47) and to 'clothe them with power from on high' i.e. empowering them with the Holy Spirit (Lk 24:49, Jn 20:22)

We may already note here that the context does not involve the daily/regular forgiveness of believers' sins, rather it focuses on the inauguration of the new ministry of the disciples which was to spread the good news of Christ's work for mankind on the Cross.

Priestly absolutional authority isn't the point here; Jesus is aiming at evangelistic privilege and responsibility.

To be a witness for Jesus included the commission to proclaim the forgiveness of sins. This does NOT mean that we have the right to decide whether or not someone's sins have been forgiven (this is God's sole prerogative). The disciples' role (and ours) was merely to convey the message of salvation in Christ Jesus that WHOEVER believes in Him shall be forgiven.  We only announce forgiveness; we do not create or determine it.

This is made clearer when we examine the original Greek used in the verse, particularly for the verbs in the phrases 'are forgiven' and 'are not forgiven'.

Tenney (Expositors' Commentary), '81: "The commission to forgive sins is phrased in an unusual construction. Literally it is, 'Those whose sins you forgive HAVE ALREADY been forgiven; those whose sins you do not forgive HAVE NOT been forgiven'...the second verbs are perfects, which imply an ABIDING STATE that began BEFORE the action of the first verbs" (emphases mine)

Dana & Mantey ('A Manual Grammar of the Greek New Testament'), '55: "(The Greek perfect tense) implies a process, but views that process as having reached its consummation and existing in a finished state"

What all the above means is that the disciples were given the authority to declare forgiveness to people whom God had already forgiven!

Tenney: "The delegation of power to the disciples to forgive or to retain the guilt of sin thus depends on the PREVIOUS forgiveness of God"

I hope we're clear now that this verse in no way supports any doctrine teaching a divinely-ordained authority upon any man to arbitrate, 'create' or determine or the forgiveness of another's sins based entirely on the former's personal judgment.

As a final comment this section, we should note that John 20:23 was spoken to the disciples, yet Jesus also commanded them to make disciples of ALL nations (Matt 28:19). This leaves us with the question of how come only Catholic priests are allowed the authority associated with the sacrament of penance but not other believers who aren't priests.

Once I'm baptised, am I not given the rights of a disciple? If not, why not?

In conclusion, we can see that:

a) The doctrine of penance ignores the CONTEXT of Jn 20:23 (evangelistic proclamation is the issue, not bestowed absolutional authority)

b) The doctrine of penance does not gather support from the WORDING of Jn 20:23 ('have been forgiven' is more accurate than 'are forgiven')

c) The doctrine of penance arbitraily restricts the APPLICATION of Jn 20:23 (what about every other disciple who's a non-priest?)

To be continued (hopefully) with, "To whom then should we confess our sins?"
 

Regards,
AL