The Christian religion is the religion of sinners, of such as have sinned, and in whom sin in some measure still dwells.  The Christian life is a life of continued repentance, humiliation for and mortification of sin, of continual faith in, thankfulness for, and love to the Redeemer, and hopeful joyful expectation of a day of glorious redemption, in which the believer shall be fully and finally acquitted, and sin abolished forever.
(Matthew Henry, A Commentary on The Whole Bible; Vol 6, 1063.)

How does God view our sin once we are His children?  As believers justified by Christ’s sacrifice, what does it mean to confess ongoing sin and ask for forgiveness?  If we stand before Him clothed in Christ’s righteousness, does He still hold us accountable for sin?  What is God’s reaction to our sin and what does it do to our ongoing walk with Him?  To answer these questions we’ll consider several scriptural truths and then use those to draw conclusions and form an understanding of what vertical forgiveness looks like for the believer.

Truth #1 – God has justified believers.  Christ’s sacrifice on the cross paid the penalty for ALL our sins.  There isn’t anything we can do in our lives that wasn’t accounted for on the cross.  Nothing else needs to happen to satisfy God’s justice in regard to our sin.  The moment we believed on Christ we were declared innocent.  Our sins were taken away and Christ’s righteousness was credited to our account.  We are therefore not under threat of God’s eternal wrath for our sin – Jesus took that for us.
Romans 4:7-8, 8:1, 8:31-34, I Thessalonians 5:9-10

Truth #2 – God is holy.  It pays to remember who it is we serve and who it is who saved us.  God’s nature and His perspective on sin never change.  The brutality and awfulness of the cross show a holy God’s view of sin.  The God described in Revelation 4 is the One who sent His Son to die and whose throne we stand before.  It is His presence we live in every day (something we should pray to be continually aware of).
Revelation 4:8-11

Truth #3 – God is our Father, not our judge.  We live in God’s presence in a wholly different relationship with Him than do those who are not His.  Because of Christ, we approach God as sons and daughters, not simply as creatures.  The judgment on our sins already occurred through Christ, so He is at peace with us and we are members of His family.  We are beloved children warmly accepted into His presence, not defendants awaiting trial. Romans 8:15, Matthew 6:9

Truth #4 – God wants His children to be like Jesus.  God made humans in His image so they would fill a perfect creation with His glory.  His intent was that His image-bearers would reflect His glory throughout the temple of the perfect earth.  Man’s fall ruined that.  The cross, however, restored it (partially in this life, fully in the next).  Since we are restored image-bearers, God wants us to become increasingly like Him.  As His children we are to look more and more like our Savior.  The circumstances and people God brings into our lives are to mold us into the image of the Son.
Romans 8:28-29

Truth #5 – God disciplines His children.  Any good father trains his children through discipline.  A father who doesn’t discipline shows that he’s careless or unloving.  Since we know God is perfect and loving, we know that He disciplines those who are His.  He doesn’t discipline them as a wrathful judge – for reasons listed above – but He disciplines as a loving Father training His children.  The purpose of the discipline is to turn them from sin.  When sin interrupts His children’s progress toward Christ-likeness, God uses discipline to bring them back (so that we may share His holiness – Heb 12:10).  And – like any discipline – it oftentimes is unpleasant.
Hebrews 12:4-11, II Samuel 7:14-15, I Corinthians 11:27-32

Supposition #1 – God doesn’t ignore the sins of His children.  If God is holy and if God wants us to progressively become like Christ, and if He disciplines us when that progression is interrupted by sin, then He obviously doesn’t overlook our sins.  We are justified and every sin we’ve ever committed or ever will commit has been paid for by Christ, but that doesn’t mean God simply looks away when we sin as His children.  Our Father is no longer our Judge, but He’s still perfectly holy.
I Peter 1:17-19

Supposition #2 – God forgives us in two ways – legally and relationally.  Since God doesn’t overlook our sins, then we presumably have to come to Him to confess them and ask for forgiveness.  But what does it mean that God forgives us of sins that Christ already paid for?  There must be two kinds of forgiveness.  When we believe the gospel, we are forgiven legally.  It’s one time for all time and we stand before God fully justified and fully assured of eternity with Him.  But when we sin as His children and confess those sins to God, He forgives us relationally.  Our sin interferes with our fellowship and communion with God; when we confess those sins He forgives and restores us.  This is why Jesus teaches us to ask for forgiveness in the model prayer (Matt 6:12) and why John says God forgives us and cleanses us when we confess our sins (I Jn 1:9).  Relational forgiveness doesn’t change where we spend eternity (although a lack of it could affect the quality of that eternity); it just affects our ongoing relationship with our Father.  Legal forgiveness is granted by our Judge.  Relational forgiveness is granted by our Father.  Both are granted based on the shed blood of Christ.  [Note – relational forgiveness does not necessarily – or even typically – mitigate consequences.  God forgives all who confess, but that doesn’t mean He removes the ramifications of their sin.  He forgave David for his sin with Bathsheba, but He didn’t remove the horrific consequences of David’s actions (II Sam 12:10-14).  What God promises as our Father, however, is that He will forgive and restore and then stay with us through any trial or suffering – even those brought on by our own sin (Ps 118:6, 94:12-14).]  The aim of confession, then, is not to erase consequences, it’s to restore joy. (John MacArthur, Total Forgiveness and the Confession of Sin; Sermon on I Jn 1:8-10, 08/18/02.)
Matthew 6:12, I John 1:9, Psalm 32:5, II Samuel 12:13

Supposition #3 – God’s fellowship with us is affected by our sin.  If there is such a thing as relational forgiveness, then apparently our sin affects our interaction with God.  Paul says our sin grieves the Holy Spirit (Eph 4:30) and that we can please God with our actions (Col 1:10).  After his sin with Bathsheba, David asks God to renew a steadfast spirit in him and restore the joy of his salvation (Ps 51:10-12).  In each case, it’s clear that sin affects our relationship with our Father.  This doesn’t mean God’s favor is dependent on our actions or that our status with Him changes.  It also doesn’t mean that every sin we commit, even unknowingly, throws a wrench in our walk.  What it means is if we have known unconfessed sin in our lives, our prayer life suffers, our worship suffers, and the work of the Holy Spirit in our lives becomes primarily that of conviction.  Sin takes away our capacity for appreciating the things of God.  Ultimately, we lose our ability to have joy in the Lord.  [And the longer we live with unaddressed sin the more our heart forgets what it means to walk closely with our Savior and truly taste and see that He is good.  It’s why God doesn’t allow His children to stay in sin without discipline.]
Psalm 32:3-4, 66:18, Proverbs 28:13

That said, we must not develop a performance-mindset with God.  God doesn’t like us more on our good days and less on our bad.  He may discipline us but He doesn’t change His view and acceptance of us.  We don’t earn our way into His presence and we don’t earn the ability to stay there.  We are what we are wholly by God’s grace.  Your worst days are never so bad that you are beyond the reach of God’s grace.  And your best days are never so good that you are beyond the need of God’s grace.  (Jerry Bridges, The Discipline of Grace; 19.)

Supposition #4 – God loves a confessing Christian.  Since we know that we will never be free of sin in this life and that sin dishonors and displeases our Father; and since we know that Christ’s sacrifice guarantees us acceptance before the Father and the restoration of relationship when we confess our sins; and since we know that confession brings us face to face with God’s mercy and grace; and since we know that nothing glorifies God more than the gospel; then it makes sense that ongoing confession of sin delights and glorifies Him.  When we confess and repent, we plant ourselves firmly on the gospel and receive forgiveness based on God’s grace and love.  Celebrating God’s grace and love pleases Him. Psalm 147-11, 51:16-17, Ephesians 1:3-14

Supposition #5 – God uses confession to make us more like Christ.  Gospel-centered repentance leads to godliness.  If confession leads us to focus more on the gospel, and the gospel is the clearest and highest example of God’s love, then confession ultimately sets our focus on God’s love.  And focusing on God’s love motivates us to obedience.  So repentance becomes an integral part of our sanctification and must be an ongoing and regular part of any believer’s life.
II Corinthians 5:14-15