The full answer on confessing sins to a priest.
In the book of Genesis we read all about the fall of Adam and Eve and about Cain killing Able. While God knew exactly what had happened and what sins had been committed, God still asks Adam and Eve [see Gen 3:11-14] what they had done. Again, when Cain kills Able in Gen 4:10, God asks Cain “What have you done?” God wants us to confess and it is therefore necessary for us to do so.
So where does the priest fit in? In Leviticus 5:5-6 we have a solid prefiguring/foreshadowing of confession and this is carried over into the New Covenant. In Lev. 5:5-6 it says, “When a man is guilty in any of these, he shall confess the sin he has committed, and he shall bring his guilt offering to the Lord for the sin which he has committed, a female from the flock, a lamb or a goat, for a sin offering; and the priest shall make atonement for him for his sin.” Note how the penitent must confess and take his sin offering to the priest, and the priest shall make atonement for him for his sin. This requires knowledge of the sin on the part of the priest.
In the New Testament we have a number of verses that refer to the authority to forgive sins. In Matthew 9:6-8, we read “But that you may know that the Son of man has authority on earth to forgive sins”–he then said to the paralytic --“Rise, take up your bed and go home.” And he rose and went home. When the crowds saw it, they were afraid, and they glorified God, who had given such authority to men." Notice how scripture says that such authority had been given to men. This is significant and is not merely a coincidence. This is the inspired word of God.
The question of authority and power to forgive sin is given obviously to Jesus and this is further affirmed in Matthew 28:18 where we are told, "And Jesus came and said to them, “All authority in heaven and on earth has been given to me.”
So just how is this authority transfered to the apostles and their successors? In John 20:21-23 "Jesus said to them, “Peace be with you. As the Father has sent me, even so I send you.” And when he had said this, he breathed on them, and said to them, “Receive the Holy Spirit. If you forgive the sins of any, they are forgiven; if you retain the sins of any, they are retained.” This is an incredible set of verses. They are rich in meaning and power. Notice that Jesus sends the apostles in the same way that the Father sent Him. The Father sent Jesus with all power and authority which included the power to forgive sins. So also Jesus sends the apostles. Jesus breathes on the apostles and says, “receive the Holy Spirit.” There is only one other time in all of scripture where God breathes on man, and that is in Genesis when God breathes life into Adam. This is a significant moment in the upper room and it is at this moment that Jesus says, “If you forgive the sins of any, they are forgiven: if you retain the sins of any they are retained.”
Later in the new testament scriptures we find additional verses that speak to confession and reconciliation. The most significant are the following:
2 Corinthians 5: 17-20
Therefore, if any one is in Christ, he is a new creation; the old has passed away, behold, the new has come. All this is from God, who through Christ reconciled us to himself and gave us the ministry of reconciliation; that is, in Christ God was reconciling the world to himself, not counting their trespasses against them, and entrusting to us the message of reconciliation. So we are ambassadors for Christ, God making his appeal through us. We beseech you on behalf of Christ, be reconciled to God.
Is any among you sick? Let him call for the presbyters [priests] of the church, and let them pray over him, anointing him with oil in the name of the Lord; and the prayer of faith will save the sick man, and the Lord will raise him up; and if he has committed sins, he will be forgiven. (“presbyter” is the root word from which we get the term priest)
Therefore confess you sins to one another….
Truly, I say to you, whatever you bind on earth shall be bound in heaven, and whatever you loose on earth shall be loosed in heaven. (In Jewish culture and faith the power to bind and loose carries a juridical dimension and has application to the forgiveness of sin)